November 1982

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EUROPE82

In this issue ...

The end of an era for Steeltown. By Ray Stemman

Facing the future: American researchers in Europe. By Denis Thomas

How much do you know about women?

Europe's students are getting around

The European Youth Orches tra: better than ever, but short of funds

Shortfall on cash for the Social Fund

A 'social guarantee' for school-leavers

Regional development: have we got it right? By John Brennan

Bookshelf

Community profile: Sir Roy Denman. By Reginald Dale

Steps towards a Mediterranean policy. By Femando Riccardi

How it looks to the Greeks. By Thierry Daman

London's 'Pompidou' is a hit with the public

Talking business

Community reports

News review

What's in the papers

EUROFORUMis inset after page 12

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Published by the Commission of the European Communities, 20 Kensington Palace Gardens, London W8 4QQ. Tel: 01-727 8090 Editor-in-Chief: George Scon Editor: John Greenwood Associate Editor: Denis Thomas Design: Lawrence Edwards Printed by Lawrence·Allen Lrd, Weston-super-Mare, Avon

Europe 82 does not necessarily reflect, in all particulars, the opinions of the Community institutions. Unsigned material may be quoted or reprinted without payment, subject to suitable acknowledgement. Belfast Offia: Windsor House, 9115 Bedford Sueet, Belfast BT2 7EG Tel. (0232) 240708 Cardrf!Offiu: 4 Cathedral Road, CardiffCF19SG Tel. (0222) 371631 Edinbwrglt Offiu: 7 Alva Street, EdioburghEH24PH Tel. (031)225 2058

Associated editions: Europe, 2100 M Street, NW, Suite 707, Washington DC 20037, USA Tel. 202 8629500 Europe, 350 Sparks Street, Suite 1110, Ouawa, Ontario, Canada K IR 7S8. Tel. (613) 238-6464 CcmtmwnityReport, 39 Molesworlh Str«t, Dublin 2, Ireland Tel. 712244 30Jowtfd'Europe, 61 rue de$ Belle$ Fcuille$, 75782Paris~dcx 16, France. Tel. 50158 85 Ccmtwnitll Ewropee, Via Poli 29, 00187 Rome,llaly. Tel. 67897 22 EF ·II1>Utfl Gammcl Torv 4, Post Box 144, 1004Copcnhagen K, Denmark. Tell44140' 145532 EGMagaztn,Zitelmannsuasse22, 5300 Bono, W. Gcnnany Tel. 238041 Ctmumtdadewropea, Scrrano,41-5 a planta Madrid-! , Spain Tel. 474 11 99 EwropaiAi Kqanotu, 2 Vassilissis So6as, T.K. 1602, Athens 134, Greece Tel. 743 982/3/4 . Ewropa-beric/11, EUR in[o, Archimcdesstrut 73, I 040 Brussel, Belgium Tel.2354178 Echosdsi'Ewrope, Batimcnt JcanMonnet, Luxembourg-Kircbber8 Tel.43011 Awupa Top/wlutw, 13 BoAaz Sokak Kavaklidere, Ankara, Turkey Tel. 276145

EUROPE82

There seems to be no end in sight for the problems facing the European steel industry. During a visit to the North-East in September I was shown the effects of the current recession on the British Steel

Corporation. I looked at the measures it has taken to cushion the blow for its redundant employees, and its imaginative efforts to create new jobs. All with the aid of European money.

I ron-making has a long history along the RiverTees. Butitsexpansiontoamajorin­dustry dates the discovery of the outcrop of a seam of ironstone on the slope of Eston

hill, back in 1850. It was of poor quality. But because it could be mined easily, and high quality coking coal was available from the south-west Durham coalfield a few miles away, a large number of blast furnaces sprang up, producing pig iron.

Along the banks of the Tees, from Red car to Stockton, and along the coast from Skinnin­grove to Port Mulgra ve, these ironworks were kept busy meeting the demand for castings for the railways and heavy engineering indus­tries.

Since those days, and with the development of steel-making techniques, the industry has had a chequered history. But by the mid-1970s, with nationalisation behind it and a se­cure future apparently ahead, the steel indus­try in the North East was ready to embark on a

ROY STEMMAN goes to see what is being done to combat unemployment in one ofBritain's industrial heartlands where further

cuts are threatened

major development that would make it a cor­nerstone of BSC. What happened instead was explained to me by Colin Over, divisional manager, administration and management services, at Steel House, Red car.

Had I tried to make theappointmenta week later, Mr Over would not have been available. For the man whose role, he told me, was 'generally to run the business as chief of staff to the managing director', was taking early re­tirement after 37 years with the company. It

was voluntary redundancy, and he was not being replaced. His responsibilities were to be scattered among his remaining colleagues.

Back in 1973, he recalled, BSC was poised to begin development of the Redcar site at a cost of £500 million. £ISO million of that was loaned by the European Investment Bank. Over £5 million was also made available by the European Regional Development Fund (ERDF) towards the cost of constructing a blast furnace.

The development programme began with the provision of ore and coal unloading facili­ties at Red car, followed by the construction of a completely new iron works. The plan, in­volving the building of a great new blast fur­nace to make 10,000 tonnes of iron a day, would enhance the steel-making capacity of Red car to S million tonnes of steel a year.

In 1973, Colin Over explained, it was envis­aged that there would be a further large-scale follow-up phase in the late 1970s through to .....

3

1985, in which a second and third blast fur­nace would have been built, together with other steel plant and a series of rolling mills that would have enabled Teesside to produce just short of 12 million tonnes of steel a year.

By 1975, when the effects of the first oil cri­sis were begining to be felt, the first phase was well under way and plans for the subsequent development were in hand. In 1977 ominous signs had appeared that steel was not likely to rattle along at the rate that had been predicted.

BSC was highly dependent in its forecasts on what other people - such as car makers, shipbuilders and plant processors- told it ab­out their markets. At the time the plans were being drawn up for 12 million tonnes of steel a year to be made at Redcar, the car industry was predicting annual output of three million cars, the Central Electricity Generating Board was unveiling a grand plan for many new pow­er stations, and British shipyards still had full order-books.

'We compounded all their errors,' said Colin Over. 'World steel consumption had been increasing at a speedy five percent a year, and no one could see any reason why that should change.'

Soon, however, the change was all too appa­rent. The line which had been climbing steadily across the graph suddenly went into a steep decline. The follow-up phase for Red car was cancelled in 1978, since when the down­ward trend has continued. The first phase of Teesside's development programme has been completed and the new works have proved themselves capable of producing the five mil­lion tonnes a year they were designed to manu­facture, but even that is more than the market will now support.

So, in fairly rapid succession, BSC has been cutting its steel-making capacity, and the North-East has not escaped. The Consett works, 40 miles north of the Tees, was closed in 1980. T hat cut steel capacity by l'l2 million tonnes annually. At Cleveland, the electric arc fmnace, capable of making 3/4 million tonnes a year, was closed a year later.

These closures were part of the plan formu­lated at the end of 1980 by BSC chairman Ian

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EUROPE82

'European Coal and Steel Community ~rants have resulted 1ngreater compensation for loss of iobs than in other industries'

MacGregor, to reduce the Corporation's out­put nationally to 14.4 million tonnes a year. Teesside was allotted more than a 20 per cent share of this total- 3 million tonnes - but that is well below its capacity.

It has been endeavouring to produce those 3 million tonnes as economically as possible­which in turn has meant more plant closures, and the scaling-down of the services that had been built up in anticipation of a 12 million tonnes output.

'Something like 6,000 workers have gone in this area,' Colin Over told me, 'and another 800 we have just negotiated to go this week.' The only consolation for these redundant workers is that European Coal and Steel Com­munity (ECSC) grants have enabled them to receive greater compensation for loss of jobs than they would have had from other indus­tries. Those ECSC grants have included over £5 '12 million for 4,928 workers at Consett, and more than £1 million for 1,188 workers affected by part closure of Cleveland works.

In three years Redcar has experienced a dramat:jc reversal: 'from buoyant, euphoric expansion towards a spartan economy, trying to hang on to the minimal single blast furnace, · single steel operation - and make it viable,' says Colin Over.

Sadly, even this may not be enough. Be­tween October 1981 and April 1982 Redcar was running at a weekly rate equivalent to the 3 million tonnes per annum it had been allo­cated under the MacGregor plan. Since then, sales have slumped badly. Output has drop­ped.to 2\14 million tonnes -less than half its capacity.

Since my visit to Redcar there have been re­ports that, faced with mounting losses, BSC is planning further economy measures, includ­ing the moth-balling ofRedcar's blast furnace to cut its output by half, bringing back into service two smaller, older units.

Future profitability will depend not only on cost -cutting exercises but also on finding more economical ways of producing steel. To that end, ECSC research grants may prove to be vital, and Teesside has received more than

£1.4 million for its research programme. Among the projects is one concerned with

electro-magnetic stirring during solidifica­tion. Another is looking at centrifuge iron­making processes; a third involves new plas­ma source spectrometric techniques for the steel industry.

For many people this research no longer has significance. Their participation in steelmak­ing has ended , and they have joined the unem­ployed. But the Corporation has not forgotten them. For nearly a decade, mainly through its job-creating arm BSC (Industry), it has en­deavoured to assist not only its former em­ployees but anyone in the areas affected by its closures who wants to start new businesses.

The origins of the company go back to Lord Melchen's days as chairman of the Corpora­tion and the appointment in late 1974 of four people, in different areas affected by closures, whose job it was to help generate new jobs. BSC (Industry) was formed in 1976, at a time when it had become obvious that the Corpora­tion would need to be drastically slimmed down.

The North-East was affected at an early stage. Hartlepool, close to the north bank of

left: the panorama ofT eesside. Above: Hartlepool's deep-water dock has been handling coadl iron ore and steel. Now its main commo ity is timber.

EUROPE82

the Tees, was one of the four places to which one of Lord Melchen's appointees was sent. Since then, and with the setting-up of BSC (Industry), Hartlepool has been as well cared for, in these bard times, as any steel closure area.

I went toseeAlan Humble, BSC (Industry) co-ordinator for the area. I found him at the Hartlepool Workshops at Sandgate Industrial Estate- one of two workshop centres which it has set up to provide accommodation for new, smalJ businesses. This formula is one that has been used to good effect in other parts of the country.

The usual arrangement is that BSC (Indus­try) acquires a disused Corporation building, converts it into industrial or commercial pre­mises, puts in a manager to look after it and to advise the tenants, and makes life easier for new businesses by giving them licences. There are no long leases to add financial bur­dens to their enterprise.

As well as the Sandgate developmem at Hartlepool, which was purpose-built, the town also has a second workshop on the Usworth Road Industrial Estate, following the purchase of a timber factory ( no BSC pre­mises were available for either of the work­shops). Sandgate is a two-acre site, and Usworth covers five acres. One of Sandgate's early tenants was an ex-BSC man who had ex­panded his hobby into a thriving business making giftware, trophies and metal sculp­tures.

The financial incentives available through BSC (Industry) are exceptional. Large com­panies attracted to steel closure areas can be­nefit from a package which includes financial help from the government, from the ECSC, from the EEC, from local authorities and from BSC (Industry) itself. The advantage for smaller firms, such as those in the workshops, quite apart from the financial considerations (including low-cost unsecured loans), is the professional help and guidance that is avail­able from consultants.

Managing the Sandgateand Usworth work­shops is George Barnes who, for 12 years of his working life with BSC, closed various of the Corporation's works. He supervised the end of iron and steel making at Hartlepool South works, closed the North works, and brought an end to the iron and steel operations at Cargo Fleet on Teesside. Now he has the more re­warding taskofhelping set up new businesses.

Alan Humble started his career in the old Consett ironworks as a management trainee. Nearly four years ago he joined BSC (Indus­try) at Consett and moved down to Hartlepool a year ago. It was at that time that the various co-ordinators were called together and asked

lfhe social conscience of British Steel has extended to encompass the community'

As a Special Development Area, Teesside qualifies for such benefits as tax allowances on capital expenditure, regional assistance schemes, cash grants from government agencies, training grants, provision of ready­built factories- and loans at low interest rates, particularly from Europe.

BSC (Industry), a wholly-owned subsidiary of British Steel, plays a leading part in the drive to bring new industry to the area. The service includes contact with bankers, trade unions, and community leaders, help in drafting applications, and professional advice backed by first­hand experience in the industrial world.

The head office is in London (01-686 0366). The North-East's Industrial Development Officer is stationed at Cleveland, Hartlepool (0429 66522).

to think about the future. ' I t is no secret,' he told me, 'that BSC will discontinue funding us from March 1984. It was always recognised that things would notgoonforever. I took the view that the problems of Hartlepool are very grave, but by no means all of BSC's making. And I felt we still had some commitment to the town.'

The solution which Alan Humble has proposed, and which has met with widespread support, is the creation of a Hartlepool Enter­prise Agency as a limited company. He is also forming one for Cleveland. He will be a direc-tor of the company, whose board of directors will include representatives from large com­panies in Hartlepool, including Rank Hovis McDougall, GEC, Barclays Bank and local authorities. It is a condition of membership that each should make a contribution to the ~

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EUROPE82

Agency. Some are making substantial finan­cial payments, others are seconding staff. 'We have enough money to guarantee the Agency's life for three years,' Alan Humble told me, 'and we are currently looking at the possibility of applying for help from the EEC.'

In effect, the social conscience of BSC has extended to encompass the community -rightly so, since most large employers have had to shed workers and so have contributed to the problems of the area. I t remains to be seen whether this concerted effort to attract and create new job opportunities will make a dent in the 20 per cent unemployment figures for the area.

Meanwhile, the EEC is lending a hand in another way. In May it was announced that the ERDF's non-quota section was making sizeable contributions to encourage new de­velopment in areas hit by steel closures. Cleve­land is one of the seven areas named. It will be receiving£2.39 million from Europe.

Britain is not alone- and this may be cold comfort-insufferinga rundownofitssteelin­dustry. The European Community is now producing less steel than thirty years ago, and demand is still falling. In the Community as a whole, a further 70,000 steelworkers are ex­pected to lost their jobs over the next three years- in addition to the quarter of a million who have been made redundant since 1975.

Consettf above, was on earlier casualty of the stee crisis in the North-East. Works, town and countryside hove suffered the shock together.

prices for steel agreed under the Davignon Plan. This results in unfair competition with­in the Ten, with the British S tee! Corporation, which has held to the agreed levels, proving especially vulnerable.

The Commission announced early in Octo­ber that it was setting up an operation within the European Regional Development Fund to help provide jobs in the worst-hit areas. It would like to see EEC Regional and Social Fund operations being coordinated with the special measures already being taken by m em-

berstates to encourage small and medium-size businesses in steel-closure areas.

With BSC's losses running at over £7 mil­lion a week, despite all that has been done to hold on lO an economic share of a shrinking world market, the situation remains critical ­even for works which are among the most up­to-date in Europe. Without the EEC's effort to hold Europe's steel industry together -however unevenly applied in member states­the outlook would be unhappier still. [I

The Commission is also being pressed to take action to stem the flow of imports from non-EEC sources such as Eastern Europe, Austria, Brazil, and South Africa. There have been complaints that steel firms in some mem­ber states are failing to observe the minimum

More ECSC funds on the way for Britain's steeltowns In the past few weeks a total of £17.1 million has been made available in low-cost loans for new investment in Britain's steel areas, under the provisions of the European Coal and Steel Community Treaty. In London on 29 July, Commissioner Ivor Richard signed a loan contract for £1.8 million with Cleveland Offshore Ltd.

The level of unemployment in the UK is particularly pronounced in areas where the steel industry has had to make workers redundant, and the ECSC provides special reconversion loans to encourage the creation of new job opportunities in these areas. Beneficial interest rates are provided by using low-interest bearing foreign currencies backed by the UK exchange risk guarantee scheme and then reducing the rates by a further 3 per cent per annum by a transfer from ECSC funds.

In Middlesbrough, Cleveland Offshore is receiving a loan of£ 1. 8 million towards the extension of their fabrication facilities for large structural steel assemblies on Teesside. This contribution, together with additional investment by parent company Trafalgar House, will create about 280 additional jobs.

In Dudley, West Midlands, Danks Engineering is receiving a loan of £2 million towards the extension of their boiler manufacturing 6

facility ofDudley. The project as a whole wiU create about 380 additional jobs. And in Newport, South Wales, Mite! Telecom is receiving a further £5 million as part of the£ 16 million loan facility already agreed towards the establishment of a new manufacturing capacity for telephone equipment. When complete this project is expected to generate about l ,700 new jobs.

Loans for less than£ 1 million are handled by a number of financial intermediaries, so making funds available to small enterprises. New disbursements in this category bring the UK total for reconversion loans to £3 7 million this year, of which £21 million has been for major projects and the balance for smaller enterprises.

Also announced are readaptation grants totalling£5,763,000 to finance measures to help workers in the British steel industry who are affected by plant closures and modernisation.

The grants are made under article 56 of the European Coal and Steel Community, and will be used to help fund current schemes for early retirement, retraining and income support which are administered by the Department oflndustry.

The bulk of the cash will go to 1800 workers, including 32 employed by IMS Lycrete, who get £5.3 million, having lost their jobs as a result of closure in 1979-81 of BSC plant at Workington and Whitehaven.

In Sheffield, south Yorkshire, 127 workers affected by the closure earlier this year of the high frequency furnace and the no. 6:mill at Firth Brown Ltd's Sa vile Street works, Sheffield, will receive £303,000.

At Stourbridge, west Midlands, 60 workers affected by the closure of one mill at John Bagnall & Sons Ltd's works, share£160,000.

ICUROPE82

Facing the future -with a shaky faith in human nature

If the populations of Europe and the United States are to advance together into the 21st century, they need to have a realistic, calculated idea of the kinds of

people they are. So runs the reasoning behind a research project by Campbell­Ewald, the international advertising group, the University ofSouthem California, and Diagnostic Research Inc, who carried out the fieldwork.

The researchers set out to discover what

Samples taken among. Europeans by US

researchers suggest that, as individuals, we take a

sceptical view of one another's natures-and of

our capacity to shape · ourends

Europeans and Americans regard as the sa- •==============·•• lient characteristics of human nature, includ-ing personal honesty, concern for one another, and feelings of integration or aliena­tionas members of society. The method was to invite responses to statements such as 'Most people will tell a lie if they think they could gain from it'; 'People pretend to care more ab­out one another than they really do'; or 'Most people inwardly dislike putting themselves out to help other people'.

The originator of the project is Professor Donald Kanter, formerly of the University of Southern California, who now heads the de­partment of management at the University of Boston. The picture that emerges from his survey is not particularly cheering to those who take human nature on trust, or who share Dr Kanter's concern that, in the West, suc­cess or failure of national entities over the next fifty years will depend on people's belief in their ability to shape the future. In this re­spect, it complements the Eurobarometer check-up reported in the September issue of EUROPE82.

Most Europeans and Americans, it appears, take a disenchanted view of human nature, though in different degrees. Cynic­ism,andacceptanceofhypocrisyindailydeal­ings, are evidently rife in Europe, though markedly less so in America. The British, closest to the Americans on several counts, standoutfortheir attachment to the here-and­now and lack of thought for the future. Dr Kanter calls that particular quality in the Brit· ish 'not so much lovable as disturbing'.

The study is a pointer to the attitudes, values and beliefs that distinguish seven cul­tures: those of the United States, Britain, France, Germany, Italy, Belgium and Hol­land. Nationals of all these countries were asked to react to the same list of assertions, de­signed to elicit unambiguous answers touching on social and moral characteristics, feelings about the present, and fears for the future.

The respondents were all women aged be­tween 22 and 50, with children at home and above-average family incomes - a demo­graphically distinct group of 3,000 indi­viduals, 2,250 of them from Europe and the

other 750 Americans. For once, these were women being questioned not as housewives or consumers but as 'culture-bearers and dis­seminators' - a role that takes into account their everyday perceptions of what they see and experience in the world around them.

In their responses, the women were speak­ing as nationals, drawing their opinions from inherent knowledge of their own people and their own class. With no axe to grind, they were giving clear indications, as Dr Kanter sees it, of national character and behaviour. Collated, their replies amount to an unwitting self-portrait by each of the national groups in the sample.

Some of these fit well with popular assump­tions, such as that Germans are hard workers (90 per cent of them agreed that 'If a person tries hard enough she will usually reach her goals in life'); or that the French are fatalistic (76 per cent of them agreed that 'Most people have little control over what happens to their life') whereas the British are not- only 27 per cent of the British sample went along with that statement.

Other findings go much further, to a point whereself-knowledgecomesassomethingofa shock. The Italians, for example, showed up conspicuously- 92 per cent of the sample, the highest rating in any category - in agreeing that 'People claim to have ethical standards, but few stick to them when money is at stake'. The British 'score' on that proposition was 62 percent, the lowest except for America ( 61 per cent).

But 62 per cent amounts to a lot of sceptical Britons, even if the average percentage figure for Europe as a whole comes out, on that point, at 85. Dr Kanter stresses that the varia­tions in degree should not be allowed to camouflage the absolute levels of response, which indicate a high degree of disbelief in conventional codes of behaviour even among the relatively non-cynical British and Amer­icans. Who believes, for example, that 'Most people will tell a lie if they could gain by it'? Answer: 92 per cent ofltalians, 89 per cent of Belgians, 87 per cent of the French, 84 per cent of Germans, and 65 per cent of Amer-

icans, British and Dutch - large majorities, and very large numbers, across the board.

Again, in response to the statement 'Most people are just out for themselves', an im­pressive - or depressing - majority agreed: from 88 per cent of Italians to 61 per cent of British. A closely related pointer to a caring, or uncaring, society emerged from the prop­osition that' Most people inwardly dislike put­tingthemselves out to help other people'. This time it was the French who headed the list of assenters with 83 per cent. The Italians were next (81 per cent) and the British last: 38 per cent, lower even than the Dutch ( 42 per cent) and the Americans (50 per cent). However, the absolute figures show that niceness is only relative. 'Britishness' comes through (Dr Kanter likes to think) in disagreement with such statements as 'It is getting harder and harder to make true friends' (only 43 per cent of the British agreed) and 'People are pretty much alike in basic interests and personalities' (a mere 28 per. cent).

The Dutch sample, true to their egalitarian stereotype, took the opposite view on this lat­ter suggestion: 72 per cent of them agreed. They also revealed a national inability to 'tune in' to other people. To the suggestion that 'You can never really understand the feelings of other people', no less than 83 per cent of the Dutch sample agreed, as opposed to 50 per cent of the British.

Generalising from responses to the various related propositions, it seems that the French, the Belgians, Italians and Dutch feel that they are less in control of their fates than do the Americans, the British and the Germans, in that order. The same group- France, Bel­gium, Italy, Holland- share a mood of res­ignation in face of officialdom.

Despite the unpromisingoutlookfor every­body, reluctance to have children is lower in Britain than in any of the European countries in the survey. On the other hand, Britain, along with Holland, seems to be least con­cerned with thoughts of the future. Dr Kanter sees this as an indication of mental inertia rather than satisfaction at the way things are. He points to the 87 per cent of the American sample who 'think about the future a lot', compared with 56 per cent of the British.

Asked why so large a minority should appear unconcerned about what lies ahead for them, Dr Kanter suggests that British history gives people a feeling of continuity and surviv­al. However, as a behavioural psychologist he takes a less comfortable view. To him, the re­luctance of 44 per cent of Britons to cast their minds forward indicates an unwillingness, or inability, to imagine a different - and more self-demanding- future.

DENIS THOMAS

7

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How much do you know about women?

Women in the 19th century faced

the choice, in the words of the French trade unionistProudhon, fbecoming 'housewives or

courtesans'. But times have changed, and so has the role of women, according to EUROFOCUS.

European Community statistics published in the current edition of Women of Europe provideawealthofunfamiliarinformationab­out women in Europe today. Marriages, for instance, seem to be working better in Bel­gium than in other European countries: about 52 per cent of Belgian women are married, compared with only 38 per cent of Irish women. Generally, Belgian and French bridesareyoungerthantheirltalianorDanish counterparts.

Divorce rates are on the way up- they have doubled since 1960 in almost every country in Europe. They have tripled in the Netherlands and increased five times in Britain. In Catholic Italy and Ireland, marriageslastlongest. Birth rates, on the other hand, are declining all over Europe. The Italians and the Irish again lead the field, ahead of the French and the banes.

But the most striking development of the last twenty years is undoubtedly the increas­ing participation of women, and especially married women, in the Community's work­force. The highest percentage ( 49 per cent) of working women are to be found in Denmark, followed by the United Kingdom, France, the Federal Republic ofGermany and Belgium. Only 13.6 per cent of the women work in Ire­land. 8

EUROPE82

A recent survey by the World Watch Insti­tute stresses that more and more women are finding work outside their homes, but are still doing domestic tasks. This means that their working week may be fifteen to twenty hours longer than that of a man. At home, women work without being paid and contribute to society, but are never included in official sta­tistics. Similarly, women working in small and medium-sized family-run farms, shops or businesses are not classified as having a 'pro­fession'. Moreover, almost 60 per cent of the family members working in similar concerns are unpaid.

Althoughdomesticchoresseem to weigh on working women, most of them seem to man­age. Threequarters of working married women have full-time jobs except in the FederalRepublicofGermanyand the Nether­lands, where the percentage is smaller.

Almost half the agricultural work force in theFederalRepublicofGermanyiscomposed of women, and almost a third in other Euro­pean countries. The number of women work­ing in the industrial sector is highest in Italy, followed by the Federal Republic of Ger­many. Generally speaking, less than a quarter of the total industrial workforce is composed -of women. But more than twothirdsofwomen

Europe's students are geHing around

• ..

who work are concentrated in the services sec­tor (almost 83 per cent in the Netherlands).

More than 60 percent of women working in agriculture are part of farmers' families; but about 90 per cent of those working in industry and 95 per cent of service workers are wage earners. Women farm managers are mostly found in Ireland and the United Kingdom. In Italy, 15 per cent of working women are em­ployers ofindependentworkersin the services sector, compared with only 4 per cent in Denmark. About 12 per cent of employers and executives in the industrial sector in Italy arewomen-slightlymorethanin the United Kingdom.

Equal pay for men and women still does not exist, especially in the industrial sector where women mostly perform unskilled jobs. Education is an important factor in this area, and Community statistics appear to be en­couraging. There are more women going to further education and university than ever before, and they amount to almost half of all students. Women are also no longer tied to traditional courses like teaching (except in Belgium and Luxembourg where the percen­tage is increasing), the arts and literature. They are now turning in increasing numbers towards medicine, the social sciences and law.

There are fewer and fewer national frontiers for Europe's students, and the 1982/83 academic year should be ·a milestone in cooperation in higher education. Among its new projects, the European Commission in Brussels has just awarded 93 new grants, worth £190,000, for students to study in other European Community member states.

The primary objective of the grants, which are paid to institutions, is to stimulate and expand the mobility of students, lecturers and scientists among the ten member states of the European Communitf. A total of some 467 grants have been awarded under the plan. But this year, for the first time, more than 60 per cent of the program­mes will involve student exchanges.

Some 5 million students are currently enrolled in the 3,400 institutions of higher learningjn the European Community. But despite encouraging cooperation in educa­tion, Community Education Commissioner lvor Richard says that 'there are still too few students benefiting from the experience of having pursued part of their studies in more than one Community country, although the links that unite the member coun­tries are multiplying, making an awareness of the other countries more and more necessary'.

The Commission grants are not strictly limited to helping students but are also de­signed to increase cooperation between institutions of higher learning. Because of them, universities as far apart as Cork and Thessaloniki can collaborate in a pro­gramme in European law. AarhusinDenmarkand Consenzain Italy have started on a joint study in information sciences, and the universities of Montpellier and Copenhagen are working together on a programmeinagriculturaleconomics. Chem­ists in Dublin and in Padua, in Italy, are also running a joint programme.

As was the case in previous years, the 1982/83 grants cover a wide range of academic disciplines. Engineering and natural sciences get a larger share of the new pro­grammes, as do the social sciences, but there is a growing proportion devoted to the fine arts, a previously under-represented field. A number of projects also have a multi­disciplinary approach. In one programme, architects, sociologists and legal experts will be studying the effects of modem urbanisation on juvenile delinquency in big cities.

C ould I call you back? You see, Sir Georg Solti has just given me the music for the Parliament's anniversary concert and I'm buried

under papers, trying to get in touch with the members of the orchestra to see if they can play it.

It is an even more usually hectic day for Nickie Spiller the orchestral manager of the European Community Youth Orchesta, now five years old and on the crest of a musical wave. They have been described by Claudio Abbado, who has wielded his baton before some of the best, as 'one of the great orches­tras' - this despite a flucruating, non-profes­sional membership and an age range of 14-23.

Abbado is currently ECYO's musical direc­tor, and Solti the 1982 guest conductor. The concert in question was the climax of the Orchestra's 1982 season, a performance of Beethoven's 'Eroica' Symphony and Strauss's

EUROPE82

The European Community Youth Orchestra has just

ended another triumphant season. But financially it's a

struggle to keep it going

'Ein Heldenleben' at Strasbourg, to celebrate the 30th anniversary of the European Parlia­ment. The Orchestra's new president is Pieter Dankert, President of the European Parlia­ment, and as Nickie Spiller puts it, ' I t's parti­cularly nice to be able to welcome our new president in this way: musically, not just by letter.'

To play before the European Parliament is something the orchestra has wanted to do ever since it started, born of an all-party resolution

by the Parliament in March 1976, and our­cured under the patronage of the member states of the European Community and the Commission. In the belief that the Commun­ity is more than a purely economic union, the founders aimed to establish an orchestra of talented and dedicated young musicians of the highest possible standard from all the member states, which would perform each year in the major capitals of the Community, demon­strating the cooperation and creativity of European youth. The musicians themselves benefit both from the chance to work with some of the world's finest conductors and the boost belonging to ECYO gives to their music­al ambitions, as well as from the experience of living and working together, developing friendships and achieving a common goal.

T he 145-strong orchestra is chosen by annual competitions in the member states from more than 4,000 applicants. Though ...

9

,.

I

Pfhe orchestra is chosen from more than 4,000 applicants every year'

AI

there is a nucleus of regular members, they have to re-audition each year against new ap­plicants, and there is an annual turnover of 40 to 50 per cent. The orchestra comes together during the college holidays for an intense re­hearsal period prior to the summer tour, which this year took in ~-en-Provence, Monte Carlo, Bologna, Perugia, Rome, Vien­Ba, Villach, Amsterdam and Ostend. At Eas­ter they had a tour to Mexico; next Easter it may be Japan. Nickie Spiller reckons the orchestra gave its best performances ever this year. 'We alway say it can't get better, but it al­ways does. I suppose it's because we have the pick of ten countries and get the finest players. It's also their attitude- they love music and they really enjoy playing.'

Ms Spiller's job involves her organising the UK auditions, getting the orchestra together and making sure tliey have the right equip­ment, stages and instruments (especially per­cussion and keyboard where the players do not use their own instruments), fixing con­certs and contracts, making travel arrange­ments, and general coordination - as well as

Shortfall on cash for the Social Fund

l he Commission has made available breakdown of applications to the

European Social Fund, and the extent o which these outweigh the resources

available to meet them. Inareplytoaquestion by JoyceQuin, MEP

for South Tyne and Wear, Mr Ivor Richard, on behalf of the Commission, produced a table (below) showing comparisons between appropriations for 1981, volume (in cash) of eligible applications received, and the rate of over-subscription. A fourth column shows the amounts which had to be refused after us­ing the requisite weighting system in respect of priority applications. Mr Richard's answer continued:

'The rate of oversubscription indicated in the table undoubtedly underestimates the true shortfall in resources, given that promo­ters do not on thew hole file applications which although eligible would not receive a priority classification in accordance with the Guide­lines and would therefore have no prospect of receiving ESF support. (For example, all training programmes for young unemployed people taking place outside the designated priority areas.)

'Although it is too early to give comparable detailed figures for 1982, it is estimated that 10

JIEUROPE 82&

travelling on tour 'to make sure all things I've arranged don't go wrong'.

She has had her nightmares, as when sup­pliers delivered a harpsichord for a piano con­certo and with irritating frequency, when in­struments have been held up at intra-Com­munity borders. 'The forms are very com­plex, and if the musicians make the slightest error everything can be held up for hours. Within the Community one would have thought there could be more freedom of movement' she says.

But there are highlights, too. Musically, for her this year it was the Vienna Performance of Mahler's Fifth Symphony. There are also the funny or touching moments which make all the hard work and hassle worthwhile. At the last concert, in Ostend, the orchestra came on wearing carnations and showered Abbado with them at the end. 'They also play awful jokes at rehearsal. Once they showered the conductor with water pistols. But at the next rehearsal Abbado got a water pistol of his own and took his revenge. It's all part of the spirit of comradeship that builds up within the Orchestra.

'Living so closely 1:ogether you get to know each other very well.l)ley}are amazing: they knowwhatisimportiUJ.~m:.'bothmusically and morally. For tb,~~4t's J:!Ot money but friendship, music~·· .~g~:~;. :Some former members found the elq>erlence 89 valuable they have started a Chimi.ber OJ.:chestra of

the general rate of oversu~scription will in-crease from 99.59 t(} over 120 per cent, and that the amount to be refused in respect of priority applications, after using the system of weighted reduction will increase from 704.25 MECUs (£394 million) to 1,245.05 MECUs (£697 million).

'As regards 1983, the Commission has

Europe for older people who want to maintain the spirit of the ECYO.

'One of the aims of the orchestra is to help people in their professional lives. We did a survey which shows having played in the ECYO is a good ticket for a job. Even among those who do not want to go to become profes­sional musicians, I don't think the experience is ever lost,' saysMsSpiller. It is an experience they would like to share with a wider range of people, but this is a difficult task in these re­cession-hit times. 'The arts are not rich these days,' says Ms Spiller, 'and though the Com­mission and the member states have upped their contributions we still have to find half our budget from private sources. These past two years have been a real struggle.

'It'ssuchashame-everyyearwegetbetter, and we would prefer to expand. We have such wonderful ideas. For instance, our tutors are the best in the world. This year, four princi­pals from the Chicago Symphony Orchestra, professors from Chicago, Utrecht, Freiburg, London, Siena and Vienna, and other world­renowned soloists. One day we would like to make that into a school, open to all those talented musicians who didn't get into the orchestra.'

In spite of the problems, Secretary General Joy Bryerrefuses to be despondent. The ECYO is determined to reach its tenth birthday. [t

taken account of Community policy priorities and the pressures on each sector of interven-tion of the Social Fund and has proposed a 44.8 per cent increase in the overall Social Fund Budget in the 1983 preliminary draft budget. These proposals have been drawn up on the basis of the Social Fund Regulations currently in force.'

Category of Appropriations Volume of Rate of over- Refused after Intervention eligible subscription weighted

applications reduction MECU MECU (%) MECU

Agriculture 5.00 17.90 258 11.73 Textiles 13.oo 35.64 174.15 16.94 Migrants 30.00 188.12 527.07 107.48

Y oungpeople: training 264.00 519.78 96.89 165.93 employment 108.00 165.16 52.93 25.59

Women 22.00 105.99 381.77 81.41 Regions 395.00 661.67 67.51 222.75 Technical progress 25.00 54.18 116.72 10.33 Groups offirtns 8.00 19.33 141.63 4.13 Handicapped 90.00 150.41 67.12 57.95 Pilot projects 3.00 3.83 27.67

Total 963.00 1,922.01 99.59 704.24

MECU means millions of European Currency Units. For conversion to £million, multiply by 0.56.

EUROPE82

lvor Richard proposes a 1social guarantee' for school-leavers

Alea for a 'radical simplification' of

the European Social Fund, enabling the Fund to 'concentrate its resources in areas of greatest

need' and also to respond to the new vocational training challenges of the 1980s, was made by Mr lvor Richard, the Commissioner for Social Affairs, on 60ctober.

MrRichardwaspresentingtwomajoritems approved by the Commission- the Commis­sion's opinion on the review of the European Social Fund, and a communication on 'voca­tional training policies in the European Com­munity in the 1980s'.

Contrasting the economic context in which the Social Fund was originally conceived-one of growth-with the present climate of persis­tent downturn, Mr Richard stressed that the Fund must adapt to be able to meet today's harsher realities. These, he said, were inst­anced by an EEC dole queue of 11 million-or 9. 7 per cent of the labour force- of which 40 per cent were age 25 or under and amongst which, in addition, were 37.2 per cent of job­less who had been out of work for 12 months or more.

In order to concentrate on meeting new training and unemployment needs, the Fund should both be simplified and possess new criteriaforselectingareasofgreatestneed,Mr Richard said. The Commission was proposing to replace the existing nine separate fields of Fund intervention with one broad category encompassing all the training and employ­ment projects for adults currently eligible within the existing Fund. In addition there would be one other category- for young peo­ple-given the importance now attached to the bourgeoning problem of youth unemploy­ment. For young people leaving school, the Commission was proposing to member states a 'social guarantee', for which some Fund money would be made available.

On the new criteria for selecting areas of greatest need, four separate indicators -general unemployment long-term, stuctural unemployment, youth unemployment and GDP per head - should be used, said Mr Richard. In addition, the areas themselves would be identified not at the usual regional level (the so-called Regional Level 11)-which has proved too large to reflect the real gravity of local pockets of high unemployment- but at Regional Level Ill (e.g. the French 'de­partement', the Italian 'provincia', the Bel-

gian 'arrondissement', the British county). However, Mr Richard emphasised that the six existing super-priority regions (Greece, Greenland, the Mezzogiorno, Northern Ire­land, Ireland and the French overseas territo­rites) would remain top priority. At the same time, the Fund would now be able to meet the challenge of unemployment black spots.

In addition, part of the Fund, said Mr Richard, would be available for supporting in­novatorytraining and employment projects in the member states.

Mr Richard, who underlined the progres­sion in Social Fund resources from just over 1,000 million ECU in 1981 to around 1,300

I li. a

Ban call is bad news for the seal hunters

.. )

lhe Commission has called for a ban n all baby seal products entering the

Community from next March, when the annual Canadian seal cull is due.

With massive_ support from the public, a resolution to this effect has been passed by the European Parliament, calling for a ban on all products from young harp and hooded seals, and from other seal species whose stocks are depleted, threatened or endangered.

It also demands more humane and accept­able killing methods; labelling regulations for seal products; and a ban on intra-Community tradeinyoungharpandhoodedsealproducts.

The Commission has formally requested the Canadian and Norwegian governments to generally prohibit the limit of whitecoats and blue backs before the start of the 1983 hunting season, andhasaskedforaresponse by the end of September. It will propose appropriate me­asures to the Council in October should the re­sponse be negative, and such measures would have to come into force before March 1983.

Consultations with Canada and Norway have not had the results hoped for as far as the moral issue is concerned: on 22 September Canada informed the Commission that it would continue to manage the seal harvest on the basis of present harvesting methods.

million ECU this year and a proposed 1,800 next, indicated the Commission's target of getting the revamped Social Fund accepted by the Council in readiness for the 1984 budget year.

A highlight of the Commission's vocational training guidelines for the 1980s, said Mr Richard, would be the setting up of a 'social guarantee' for the young. Quoting from the Commission communication, he outlined the social guarantee proposal in the following terms:

'The general aim of the social guarantee should be to provide all young people with the opportunity to pass through a stage of transi­tion between the end of full-time compulsory schooling and entry into the labour market, during which time they should be able to choose how to develop their social and voca­tional skills and prepare themselves for adult working life.

'The immediate aim of the social guarantee should be to ensure that no young person at the age of IS or 16 should be faced with no alternative to unemployment on leaving school. As a general principle all young people should be entitled to at least two years' further education, training or work experience after leaving full-time compulsory schooling'. nl

The Commission has asked the Nature Conservancy Council to update the status re­ports on harp and hooded seals. The Council warns that the populations of the two species havedeclinedsubstantiallyoveralongperiod, and in the case of the harp seal to less than half its unexploited size,i.e. to considerably below its maximum sustainable yield level. The position of the hooded seal is in every respect more serious, and there is a risk that the population would be endangered by a con­tinuation of present rates of exploitation.

Some member states already have legisla­tion or controls for the protection of seals. In France, representatives of the fur trade con­firmed their total opposition to the killing of baby seals as long ago as June 1977, and adopted a charter imposing self-restriction. Since then, no skins of baby m:als have been used in France for industrial purposes.

In theN etherlandsageneraladministrative order came into force in September 1980, pro­hibiting in principle the possession of seal skins and seal products for purposes of sale, offer for sale, or onward delivery. In Italy, im­porting seals skins has been subject to prior authorisation since June 1978. The aim has been to stop the import of baby seal skins rather than to stop trade in skins from adult seals.

The United Kingdom has prohibited the supply of goods made wholly or partly from seal skins unless marked with information to that effect. The labelling order, which has been effective from 1 January 198l,alsostipu­lates that the country or geographical location where the seals were taken must also be indi­cated. · [I

11

EUROPE82

Regional development: are we going the right way about it?

I n the past decade, about 90 per cent of the direct state expenditure on job­creating schemes within Europe has been channelled into fiercely .

competitive regional development programmes. But at the University of Strathclyde, Kevin Alien, who has been carrying out detailed research into European regional policies*, feels that a wind of change is already blowing through the offices of the regional planners.

There is a feeling that the problem of re­gional industrial regeneration may not, after all, be solved by throwing money at it. Even before the European Council's recent call for co-operation, there was a growing fear that competitive national development plans were simply pushing up costs as region vied with re­gion for a limited number of projected new jobs.

Until a couple of years ago, Kevin Alien re­ports, escalation was the dominant trend in European regional incentive policy. An ever wider range of industrial projects were co­vered by regional incentives: not just the early programmes of investment help for new fac-

tories, but a whole basket-full of allowances for business schemes - from existing plant modernisation to partial cover of reorganisa­tion- and even rationalisation costs. Govern­ments started offering assistance to service businesses as well as to manufacturers and bowed to local economic or political press­ures.

The amount spent on regional assistance spiralled in the late 1970's. Figures issued by the Centre for the Study of Public Policy at Strathclyde show that Belgium and France virtually doubled their regional incentive spending, in real terms, between 1975 and 1979. Ireland increased its regional awards by over SO per cent, Germany by 41 per cent, the Netherlands and Italy by 11 percent and 12.5 per cent respectively. Only the United King­dom and Denmark actually reduced their ex­penditure in real terms in that period.

But the figures exclude European Commis­sion grants for infrastructure, industry and projects to boost tourism in depressed re­gions. The UK alone has received £816 mil­lionofEECaid since 1975.

Kevin Alien sees this escalation partly as a

response to a deteriorating regional problem, and also as a self-sustaining process, as coun­tries use regional incentive policy to try to keep up with each other rather than lose out in 'the battle for inward investment'.

It is argued, convincingly, that without this local aid the present employment picture would be even bleaker. But it is also being rec­ognised that someregionalassistancehas been wasted in non-productive duplication of effort and in equally unproductive competition.

Budgetary limitations have, naturally enough, forced governments to take a close lookatsuchspendingprogrammes. Denmark severely cut back on its definition of areas of assistance in 1979, and Britain followed in 1981. The Federal Republic of Germany has declassified a number of previously grant­packed territories. Belgium and Italy are both considering similar moves.

The Germans have concluded that regional aidwasbeingspreadtoothinlytobeeffective­an argument that has been gathering support elsewhere within Europe.

Capital allowances and plant purchase sup­port are all very well for capital-intensive in­dustries, but not a great deal of use to service businesses. New aid packages have taken account of this tending to provide an increas­ing amount of help for small companies and start-up schemes. Because of the greater administrative problems involved in finan­cially supporting smaller companies, the European Investment Bank delegates loanau­thorisationfor sums of£2.5 million and under to the national regional aid authorities. And the regional authorities have been making ever greater use of those facilities.

A change in attitude towards regional poli­cy became inevitable when, as Kevin Alien says, 'unemployment in many of the sp-called prosperous areas reached levels which, five years ago, would have warranted problem­area designation.' It was a case of either cut­ting back on the areas of assistance or accept­ing that virtually the whole of Europe needed help.

That blurring of the boundaries of problem areas may force national regional planners to take a fresh look at the European Council's calls for co-operation. In the meantime, re­gional policies still have an important role.

H Europe's economies do revive, says Alien, regional aid will help prevent the areas hit hardest by recession from becoming eco­nomic deadweights holding back eventual re­covery. HEEC member states have to accept long-term or even permanent structural un­employment, then he feels that regional policy will be justified on social and political grounds. But in that case it will be not only re­gional aid programmes that have failed, but entire national economic strategies.

JOHNBRENNAN

*European Regional Incentives. By Douglas Yuill and Kevin Alien. Centre for the Study of Public Policy, University of Strathclyde, price£25.00.

Trouble in the family: what Gaston Thorn told the Americans In these days of discord, let us at the outset distil the essence of Ew-opean/US relations. We share a civilisation founded on the principles of individual liberty. We each govern ourselves according to democratic principles. The American Constitution enshrines principles to which we both subscribe. We are, in short, members of one family.

This fact has been demonstrated again and again in the last 30 years. Think of the Marshal! Plan, the Atlantic Pact, the

· Berlin Airlift, the Helsinki Agreement. Even the development of our European Community is, in part, a testimony to America's willingness to promote and reinforce the union of our member countries.

The establishment of the European Community has allowed our member states to grow in economic and political strength. The whole has become far greater than the sum of its parts. And this has brought benefits for us and for the United States. Nevertheless, we all know that our family disputes have de­veloped to the point that charges, coun­ter-charges and recriminations are threateningtherelationship. Let me try to assess the causes. I believe all this re­flects a deep malaise. And I believe it arises from two sets of factors.

The first is the world economic reces­sion. This is placing an increasing and dangerous strain o:n the world's trading and financial structure. And from this has grown an impatience with the mul­ti-lateral agreements and institutions

D President Thorn was speaking at the Council ofForeignAffairsin Chicago on 27 September.

NOVEMBER 1982

'lt seems to me that we run grave risks of almost dailY. explosions 1f we do not come to some common view of trade with the Soviet Union'

we have built up together since the end of the Second World War. President Kennedy once said 'a rising tide lifts all boats'. But the opposite can happen. In our case, we are not far from the mud at thebottomoftheharbour.

The second is a basic difference in appreciation between us of some of the key questions in our relations between eachotherandwiththerestoftheworld.

How hardhavewetried tocometoajoint assessmentofourenergyneeds?Whatis ourjointassessmentoftherelations and trade we need to have with the Soviet Union and other members of the East Bloc? What should be our joint assess­ment of the relations we need to have with the developing world?

Ifthere is fundamental disagreement and misunderstanding between us on some of the basic questions, then inevit­ably things are going to go wrong.

On the world economic recession and the strains on the multilateral system, we are dealing with considerable and growing dangers. PreSSUres to limit im­ports into the United States are grow­ing. In the Community our unemploy­ment - already standing at nearly 11 million and theworstsincethe 1930s-is expected to grow,partly byreasonofcer­taindemographictrends byseveralmil­lionbythemid-1980s.Allthiswillplace a heavy strain on the multilateral rules and institutions which in the trade field have given the western world for 35 years the· biggest single period of prosperity in recorded history. But triumphs are never very far from disas­ters; and this system- which many for long ~ve taken for granted- could un­mvel with frightening speed.

This makes it essential that there is, over the next year or so, a revival of in­dustrial activity in the major developed countries. This would in turn ease some of the burdens on the fragility of the in­ternational financial system. So far, the rule of law in world trade has held. But unless hope can soon be given to the mil­lions of unemployed, and to an uncon­fident business community, the odds are ·that the system will bust.

For us in the Community, therefore, asforthe United States, thismakesitall the more important that the November Ministerial meeting of the GATI' in Geneva should be a success. It would be wrong to exaggemte expectations. Fifty or so ministers meeting for three days­even with a lot of arduous preparatory work- cannot hope realistically to cre­ateanewheavenandanewearth.Butif we can get a genuine recommitment to the maintenance of the one-world trad­ing system, a refusal to espouse protec­tionist solutions and a determination to avoid unmvelling the system, then the November meeting will have done a good job.

We and our US colleagues are work-ing closely together to that end, as we arewithahostofothercountries,butthe biggest single contribution we can both make to the success of this meeting on which much will depend, would be a re­solutionofsomeofthebilateraldisputes which are straining our family rela­tionship to a dangerous point. If, by ....

(i)

~.,.......,~, .. -........... ,..,.~.- ----'"""'"""'~~~ ~ ,,_ _ _..,,.,,.....,.. .. ~"' ""-""""'~--~~ "" -~~~ -""""' ~--~"""'-~ ~ - -

~ ·November, we have not made progress on steel, the pipeline, and some of om agricultural disputes, then this trouble in the family will make it signifi.ca.Jitly more difficult to get the kind of results we all want at Geneva.

Let me in this context mention·steel. The magnitude of the steel crisis in the United States and in Europe, the size of the trade in danger and the consequ­encesofafailuretolivoida breach woUld be very considerable. We need a settle­ment which represents to both sides a fair deal. The basisofasolutionbasbeen sketched out. We need it quickly- even more beCause a settlement on this que&­tion would be a signal to the world that we would be able to go beyond rhetoric to tackle the other disputes dividing the alliance. We have bad enough so far of the dynamic of disagreement. What we neednowiSthe dynamic of agreement:

Then there is the question of differ­ences of assessment. 1 think that what· has gone wrong with our relations for the last few years is that we have con~ centrated too much on day-to-day btisi~ ness and not devoted enough time and effort to seeing whether we could come to a se:p.si.ble joint assessment of ques­tions essential to both our interests. For example, it seems to me that we run grave risks of almost daily explosions if we do not see whether we can come to some common view of trade with the Soviet Union.

A number of elements of otir joint appreciation between democracies are already there, but what balimce should be set between profiting from trade and building up the might of the SovietUn~ · ion? What is the relation between these and repressive nieasures. inside the Soviet empire? What part in this have sales of high technology and grain to play? To the extent that we do not try and get some common view on these questions we are in constant danger of decisions being taken which cannot easily be reversed, and which can do lasting damage to our relationship.

What l would urge in conclusion is this: we need to remember that we are a family, even in difficult and troubled times and with quarrels between its members, Weneedtosettleasquicklyas we can some of the major disputes be­tween us without either side appearing the winner or the loser. If we fail, let us beabsolutelyclearthatneithersidewill win. We both will lose.

We need to go on from there to make' the November GATT meeting in Gene­va a success, in terms not of spectacular andoverambitiousgoalsbutofapractic­al determination not to permit an un:: ravelling of the open world trading sys­tem.

(ii)

We are using less petrol-so why does the price go up? The EEC motori.st, for~ to pay more for his petrol as a result of the real or perceived oil shortages of1979 and 1980, has not benefited from the modest fall in crude prices brought by the glut in supplies of recent months. Ifhe wonders why, he may reckon he is the victim of a _cash .. strapped national government seeking to boost its revenues by increasing taxes on petroleum products. Or he may assUlne that the strength of the dollar has cancelled out the ~all in pt1-ce when translated into a Community cUl'rency. .. Even ifhe blamed both these causes he would be only partly

.. right, for a major reason why the fall in price has not been passed on to him lies in the critical financial state oftlie oil refining industry. . ..

As dexnand continues to drop (and oil consumption in the Community fell by 18.5 per cent between 1979 and 1982) excess capacity has built up. According tothelatestesti.matefromtheEuropeail Commission, capacity utilisation in EECrefinerieswillbeonly57percentin 1982, marginally worse than the pre­viously lowest level of 58 per cent re­corded last year. With so muCh idle capacity, unit pl1>duction. costs have rocketed. Do~ oil ~d petrochemic:al

operations were expanded m the 19608 and early 1970son the assumption that thepriceofoilwoUidrerilaihlowandde­mand high. Largely thanks to OPEC's price-setting role, oil prices have in­creased since 1973 from $2.60 to $34 a barreL However, a number of invest­ment projects decided on by oil com­-panies before the first oil shock only came on stream after 1973. In fact, re­fining capacity in the Community, which stood at 787 million tonnes in 1973 actuallypeakedat850 million ton~ nes in 1977, four years later. It bad fhl.­len back to 784 million tonnes (just under the pre-l973level) at the start of 1982.

·Many companies have been running their refining operations at a loss for severalyears,inthehopethattherecov­ery from the recession was just around the corner. Now they have come to accept that even if there is a modest up-

• turn in the European economy, there will be no demand recovery for pet­roleumproductsoverthenextfiveyears. They·are therefore envisaging serious cuts in their refining capacities between now and 1985. According to information given to the Commission. from 12 major

The Commission recommends that maximum capacity in 1985 shourd be 600 million tonnes Mttrr

,, oilgroupsrepresenting80perunitofthe European refining industry, it is plan­n~ to cut capacity between 1982 and 1985 by 124 million tonnes bringing it down from 784million to660 million.

The Commission eonsiders this is not sufficient, and recommends that the maximum capacitY in 1985 shoUld be 600 million tonnes only. Even on its mqst optimistic assumption this will still leave the EEC refining industry working at 78 per cent of capacity. Tak­ing a median forecast, the level of capac­ity utilisation would be 70per cent. The proposed .cuts in total Community re­fining capacity are spread fairly evenly among all thelargememberstates, with Italy proposing the smallest cut (15 per cent) and Gerinany the highest (25 per cent). Virtually all companies are plan­ning reductions, although the propor­tion of capacity scheduled for closure varies considerably according to the stage reached in their individual corp­orate plans.

The fall in demand for petroleum pro­ducts is linked to several factors. These include the lower level of economic activity in member states due to the re­cession together with a conscious effort to conserve energy and a switch to alternative fuels.

The switch to dlternative fuels is

strongly influencing the pattern of de­mand for finished products. The most significant change is the sharp fall in de­mand for heavy fuel oil. This is because fuel oil, used for electricity generation and other heavy industrial purposes, has the most substitutes in the form of coal, nuclear power and natural gas. Fuel oil, which accounted for 38 per cent of finished products in 1973 and 28.5 per cent in 1980, is likely to see its share drop even further to 25 percent by 1985. Demand for lighter products-the reces­sion notwithstanding- is likely to hold up. Substitutes for these products -motor gasoline, jet fuel, diesel as well as petrochemical feedstocks such as naph­tha-are also less readily available. The proportion of gasoline and naphtha in final demand which stood at 17.5 per cent in 1973 and22percentin 1980isex­pected to reach 23.2 per cent by 1985. The share of jet fuel and diesel is ex­pected to hold steady at about 34 per cent.

Because of this new pattern of de­mand, grafted on to the overall fall in sales, refiners will not only have to shut down some oftheirprimaryre:finingun­its, they will also have to upgrade others toobtainahighershareoflightproducts from their crude oil. The increase in de­mand for more profitable light products will partly offset the loss of revenue suf­fered by refiners as total demand de­clines, butthenecessaryinvestmentson additional and complicated conversion units and higher costs (because these processes are themselves energy-inten­sive) will raise the industry's capital and operatmg charges. These activities will, however, also cushion to a certain extent the social impact of shutting down re­dundant capacity.

The closures planned by oil com­panies during 1982-1985 include the shuttingdownof13 entire refineries and of eight crude distillation units at larger refineries whose other activities would remain unaffected. Since oil refineries are capital-intensive and employ re­lativelyfewpeople, firms shutting down capacity should in most cases be able to make arrangements for workers made redundant by closures. The numbers employed in the refineries already ear­marked for closure varies between 200 to 1, 700 with a total for the 13 of some 11,000-12,000. Redeployment to other activities will absorb part of these work­ers while early retirement and natural wastage should reduce actual redun­dancies to small dimensions.

The Commission, in its latest prog­ress report on the problems of the oil re­fining industry (Communication from tb.e Commission to the CouncilofMinis­tersof15thJune, 1982), notesthatifin

EUROFORUM•

Governments or local authorities may have to step in with iob-creation schemes

..

certain cases closures in Community re­gions where unemployment is already high do prove to have serious structural consequences, goverrunents or local au­thorities may have to step in with job­creation schemes. Community finance from the European Regional Develop­ment Fund might be provided for this purpose. Aid from the European Social Fund could also be made available to complement national efforts, either for worker retraining or in the form of in­centive subsidies to firms taking on re­dundant refinery workers.

Plant closures in the areas where thereisaconcentrationofre:finingactiv­ity in the Community (Rotterdam, Fos­sur-Mer, Milford Haven, for example) will be less damaging from the employ­mentpoiri.tofview because it is precisely in these regions that redundant person­nel can :find work at other refineries which are installin.g new plant.

We support UN Lebanon peace plan, say Ten's Foreign Ministers The Cotnmunitywas well to the fore as world opinion condemned the slaughter ofPalestinian civilians in thetwoLebanese~psofSabra and Chatillain September.

Less than twenty-four hours after the first details of the killings had been re­leased, the Ten's Foreign Ministers issued a tough statementinBrusselsex­pressing their 'profound shock and re­vulSion' at the massacre of Palesti:ilian civilians in Beirut.

They also indicated they would be ready to support 'to the limit of their capabilities' any measures that would guarantee peace in the country.

This could be achieved by strengthen­ing the United Nations. observers team in Beirut or deploying UN or multina­tional forces. Apart from the possible

What will be the impact of new re­fining capacities being built by the oil­producing countries themselves on the EEC market?

The Commission feels that, although imports of finished products have adversely affected refineries in Italy and Holland, who have specialised in re­fining third parties' crude, the impact will be very modest in the near-term fu­ture. Other specialists would not be so sure. Price trends are also uncertain. Refiners have in the past made things more difficult for themselves, pushing prices for finished products even lower by their habit of over-re:fininginorderto keeptheirthroughputfromfallingeven further.

These pressures were reinforced for a time by the oil-exporting countries themselves who sent their crude for re­fining and resale in Europe to get round OPEC production ceilings on crude oil.

The Commission believes that the process of restructuring the industry, by concentrating operations on fewer, more complex refineries and securing a fair return on investment should be the responsibility of the companies them­selves, responding to market forces. The means of correcting the current imba­lances are to hand if the companies are ready to make use of them.

ROBERTTAYLOR

-contribution of army personnel, the Community countries could provide supplies, transport or financial aid. The Miriisters also repeated their offer to help in the relief and reconstruction of the country.

The Community statement followed closely earlier pronouncements on what the Ten consider to be the best basis for a lasting peace in the Middle East. They welcomed President Reagan's sugges­tion for Palestinian self-determination in association with Jordan, and recog­nised the importance of the statement adopted by Arab heads of state and gov­ernment at Fez on 9 September.

The Foreign Ministers saw the Fez announcement as 'an expression of the unanimous will of the participants, in­cluding the PLO, to work for the achievement of a just peace in the Mid­dle East encompassing all states in the area, including Israel'. In an open in­vitation to Israel, the statement con­tinued: 'They call now for a similar ex­pression of a will to peace on the part of Israel'.

DespitetheexpulsionofthePLOfrom Lebanon, the Community has show it still considers them an essential ele­ment in any negotiations.

(ill)

EUROFOR~~----------~----------------~

EUROPEAN REVIEW Inf1ati.onrate country's health and education cultivation in the Netherlands Challenging slows down ministries, while revenue from and the Federal Republic of frontier checks the sale of the balance would go Germany and to control voles Therateofinflationinthe towards the building of75 in Dutch and British orchards. Personal checks on travelleni Community is slowing down. 'people's shops' in an effort to Community Environment crossing the Community's According to the Community stabilise consumer prices. Commissioner Karl-Heinz internal frontiers should be Statistical Office in Nmjes has told German phased out, according to Luxembourg, prices inCreased

The plight of Christian Democrat MEP German socialist MEP, Mr

byonly6.8percentduringthe MeinholfMertens that Dieter Rogalla. first eight months of1982 the illiterate Commission officials are now He put his plea to compared with an 8.5 per cent

Conservative estimates reviewing exceptions to the Community governments after

rise in the same period last marketing ban. cycling 4 77 miles from his year. suggest that about 55 percent constituency ofGronau-

In August the consumer ofEurope'sunemployedhave The long and Glanerbriicke to Strasbourg price index went up by 0.5 per only a primary education and

winding road earlierthisyear.Commission cent-just half the increase have problems reading and President Gaston Thorn has recorded in the same month .. ,, writing. For the first time in the history already expressed his support last year. Traditionallytherise The problems of those with oftheCommunity, the Council for an end to border identity in prices during the month of little formal education have not ofMinisters could be taken checks. August is a bit like everything· only been aggravated by the before the Court of Justice for Mr Rogallajustified his else during the holiday period- recession- they are being 'failure to act' in an area of demand by pointing out that no more sluggish. increasingly ignored as Community policy. customsdutiesarechargedon

COlD,petition for jobs becomes At its plenary session in Community products crossing

Skills for the future more andmoreintense-and Strasbourg on 15 September, from one member state to they are being further the European Parliament another.

The Commission is to put alienated by the rapid decided to take the Transport forward ideas for harmonising introduction of new Ministers before the Court for ·apprenticeships for the skilled · technologies. failingtoachieveoneofthe Culture on workers ofEurope's industrial In nrld-September, a three- objectives set down clearly in the move future, according to day symposium on the training the Treaty ofRome- the Employment Commissioner of adults with little forinal creation of a common transport On the strength of experience IvorRichard. education was held in Liege, policy. gained since 1977, when a

Replying to a written Belgium, under the auspices of The MEPs pointed :Out that Community Action question from German the European Social Fund. the Council currently has a Programme in the cultural Socialist MEP Horst Seefeld, Representatives from long list of Commission field was first proposed, the Mr Richard said that the organisations across Europe proposals in this sector before Commission has now outlined Commission,withtheAdvisory involved in adult education it, on which no action has yet plans to step up its activities in Committee for Vocational adressed the gathering arid been taken. The Council was this area, with the following Training and the European working groups were set up to given two months in which to four priority areas: Centre for the Development of ~ discuss different aspects of the respond to the MEPs' call. Freedom of trade in cultural Vocational Training ·· · .... pi'o1ilem. Ifthereisnoresponse,orifit · goods . (CEDEFOP), in Berlin, had Over the last five years the is unsatisfactory, the President Improving the living and already completed an · Social Fund has been assisting of the Parliament will be told to working conditions of artists examination of the training ,this type of education although open formal proceedings in the and authors. needs of electricians and motor the extent to which untrained Court. Enlarging the audience. mechanics. adults are catered for varies · Conservation of the

The catering and considerably between member Sorting out car architectural heritage. construction industries were states. insurance under study and the metalworking and engineering Todaythereareabout20,000 'Ban these war industries were likely to Birds poisoned on more accidents every year on toys'-MEPs soon come un<ier scrutiny. Lake Constance Europe's road than there were

15 years ago and European The European Parliament has

Food aid for Hundredsofbirds around Lake drivers run far greater risks of called in September for a

Honduras Constancemay have died as a falling foul of insurance clampdown on the sale and resultofendrin poisoning, companies. advertising of war toys.

Since 197 4 Honduras has according to West German Different insurance . TheMEPs took this step by received more than 20 million newspaper reports. premiums in different 82 votes to 45, on the grounds ECU infoodaidfrom the Endrin is a cholorofluoro- Community member states the toys may represent a Community. This year 600 carbon which was the object of have often, resulted in differing, physical danger to children and tonnesofbutteroil was to have twoproposed1979directives and sometimes inadequate, are frequently used as replica been made available. But aimed at limiting its discharge amounts of compensation being weapons in the perpetration of following a request from the into the Community's rivers paid to accident victims. crime. Honduras government, the ,andlakes. However, the To. :remedy the situation, the The move follows warnings Commission is now proposing Council did not approve the .· Council is currently studying a from some police forces, that some 2,000 tonnes of . proposals at the time. proposal from the Commission especially the Royal Ulster skimmed milk powder, valued ·Ministers had previously for a second directive on the Constabulary, that tragic at 2.3 millionECU, be banned the sale and use of · harmonisation of road accident conseqtiencescould arise if allocated instead. endrin, in 1978, but permitted insurance schemes, to provide a they are confronted by children

One thousand tonnes would its 'temporary' marketing and minimumcoverforaccident holding what appear to be real be handed out free by the use to help strawberry victims. weapons.

(iv)

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EUROPE82

SIRROYDENMAN, the European Community's top man in Washington

In its new head, Sir Roy Denman, the EC Delegation in Washington has acquired a tough-talking bon viveur and raconteur- and arguably the world's most experienced trade negotiator. With US-EC trade and economic relations at their

lowest ebb for years, perhaps ever, Sir Roy is likely to find as much need of his trade expertise in his new job as he did in his last one, as the EC Commission's Director General for External Relations in Brussels.

Not so long ago, he began a speech on the 'world trade outlook' with a personal reminscence. As a junior officer fighting in the Burmese jungle in World War 11, he and his unit found themselves surrounded, outnumbered, and running short of essential supplies such as whisky and ammmunition. It was pouring with tropical rain. The young Denman asked his sergeant what he thought of the 'outlook.' 'The outlook, sir, is so ... awful that you'd have to be a ... idiot to ask,' came the reply.

Two years have passed since that succinct assessment and US-European trade relations have deteriorated still further- to a point which Sir Roy believes to be the worst since the war. There seems little hope of persuading the US steel industry to drop legal action that could lead to massive punitive duties on European steel exports-and possible European retaliation against American farm exports.

The United States continues to insist that the Community is unfairly subsidising steel and agricultural exporrs. The Europeans are enraged over President Reagan's sanctions against the Siberian pipeline, through which they plan to buy

lfhe strains will get worse

before the~ get better

Soviet natural gas, and they argue that the United States is far from guiltless on the subsidies front- for instance, through the export-promoting mechanism of the Domestic and International Sales Corporation.

Sir Roy, who has been dealing with these issues for many months, is gloomy about the possibility of negotiating a trade­off. He believes that the strains in the transatlantic relationship

Last May he delivered a comprehensive and blistering attack on US trade ~olicies in a speech in Houston, Texas

are likely to get worse before they get better. Only last May, he delivered a comprehensive and blistering attack on US trade policies in a speech in Houston, Texas. It was one of the most outspoken of a career in which he has never been known for mincing his words.

He accused the United States of going 'a million miles beyond' what was negotiated in the Tokyo Round of the multilateral trade negotiations, hinted broadly that Washington was disregarding General Agreement on Tariffs and Trade rules, and said that the Reagan Administration was trying to unload its problems on 'foreigners in general and Europeans in particular'.

His barbs, however, have not always been directed at the United States. He caused outrage in Japan, just before the 1979 Tokyo summit, by writing in an internal Commission working document, promptly leaked to the press, that Japan was 'a country of workaholics who live in what Westerners would regard as little more th.an rabbit hutches'. He is still unrepentant, pointing out that Japanese officials privately agreed, and that he is himself a 'workaholic'.

As one of the senior members of the team that negotiated British entry into the Community in the early 1970s, he could be just as scathing about his future partners. He would show the traditional trade negotiator's delight at scoring a point off the French, or the Germans, or indeed the Commission, on some obscure tariff provision that 99 per cent of humanity has never even heard of. In 1977, the poacher turned gamekeeper, taking over as the Community's chief trade trouble-shooter in Brussels.

His negotiating opponents have never doubted his 'Skills, or his ready wit and his joie de vivre. He likes to live well and feels few qualms about people knowing it. A British newspaper once described him as the sort of man who can order the best wine in most of Europe's leading restaurants without ever having to look at the wine list.

Sir Roy has an enormous reservoir of literary and historical quotations to back up the more technical points he makes on trade issues- although there is one recent alusion he may prefer to forget. In his Houston speech, he recalled Mark Twain's remark about Thomas Carlyle's attitude toward Americans: 'At bottom he was probably fond of them, but he was always able to conceal it'.

Sir Roy insists that he doesn't have to conceal his liking for Americans. He recently told the Wall Street Journal: 'I'm looking forward to dealing with them, with a dry martini in my hand'.

REGINALDDALE US Editor, Financial Times

13

EUROPE82

Steps towards a Mediterranean policy

T: he European Community's Mediterranean policy is not operating o the satisfaction of its partners. This not a comment made by a journalist

or a representative of one of the countries in question: it is part of a communication to the Council of Ministers and to the European Parliament from the European Commission.

The report was put together under the responsibility of Vice-President Lorenzo Natali, the commissioner in charge of Medi­terranean policy and EEC enlargement. The policy clearly needs to be revised and given a new breath of life, not only in view of the Community's future enlargement (to include Spain and Portugal), but also if the Commun­ity's relationships with its neighbours in the southern Mediterranean are to be preserved.

Unless such action is taken, the deteriora­tion of relations could have far-reaching con­sequences. Even if enlargement were not im­minent, and negotiations with Spain and Por­tugal were to slow down, the Community must reconsider its Mediterranean policy, give it new momentum, increase its financial aspects, and give it more courage and generos­ity.

The need for a 'global policy' in the region, over and above individual agreements with one or another neighbouring country, was recognised in the 1960s and the first tentative guidelines were defined and progressively ap­plied in the early 1970s. It was based on a com­bination of trade measures and provisions for economic and financial co-operation, with a certain balance being maintained in the con­cessions accorded different countries, given their relative wealth, population, and require­ments.

FERNANDO RICCARDI outlines the need for a

concerted approach to a region that is essential to the

political and economic balance of the world

The hoped-for results were never obtained, however, and the Community could not really contribute effectively to either the economic and social development or the political stabil­ity of the zone. The trade deficit of the Mediterranean countries with the Commun­ity actually increased instead of falling, con­flicts emerged, and an uneasiness in relations set in. The reasons for this are multiple. They are based more on circumstances than any de­liberate bad faith on the part of any of the partners.

The international economic situation play­ed a major role in this area. A policy devised in the boom years, whenEuropeneededmigrant labour, could not succeed in leaner times. In fact, Mediterranean agricultural exports to­ward the Common Market had to slow down because of the need to maintain the Commun­ity 'preference' for similar products. Secondly Mediterranean industrial exports could not develop as planned because the crisis forced the Community to protect its market in the very sectors where the Mediterranean coun­tries are competitive (especially textiles). Third, immigration (which is not a solution in itself, but could have resolved some problems in the short-term) was interrupted because of increasing unemployment within Europe.

And budgetary restrictions prevented the Community from implementing the financial cooperation chapter as fully as it would have liked.

Unfortunately, the negative circumstances have not disappeared. The memorandum drawn up by Commissioner Natali does not hide the fact that the new Mediterranean poll­cy will mean an overall effort, sacrifices, and political vision. If the Community only looks to its short-term interests, it will never find solutions that go to the heart of the problem. The Mediterranean region is essential for world balance. This is both for economic (it is a major route for the Community's oil sup­plies) and strategic reasons.

Europe has specific responsibilities, given the fact that a number of its current regions (Greece, a large part ofltaly, a part of France) and a future region (Spain) belong to the Mediterranean. The wide-ranging economic links are supplemented by historical, cultu­ral, and other ties. This excludes any possibil­ity of 'disengagement'. By not taking any ac­tion, the Community could, it is true, succeed in reducing the pressure on its market from Mediterranean agricultural and industrial ex­ports. However, it would lose markets which are important today, and will be even more so in the years ahead. Europe's absence in the southern Mediterranean would, above all, have an incalculable political and strategic im­pact.

There can be no vacuum in that region: if the Mediterranean countries lose their natural outlets in Western Europe, they will be forced to look further away, in Eastern Europe, with all that this involves. The Natali memoran­dum stresses that 'the Community of 12 re­mains the indispensable outlet for the exports

Structure of trade between the EEC and its principal South Mediterranean trading partners (1978) ExportstotheEEC(%) lmportsfromtheEEC(%)

Morocco Algeria Tunisia Egypt Israel Morocco Algeria Tunisia Egypt Israel

Fruit and veg 33.3 0.8 4.8 2.2 26.1 0.4 0.6 0.4 0.2 Cereals 1.7 3.4 1.8 6.6 0.3 Manufactures

(less textiles) 9.4 1.1 2.6 4.3 27.9 20.3 22.9 17.2 10.9 36.8 Minfuels&

non-foodraw 27.4 94.9 33.1 79.2 12.6 2.4 4.1 3.9 2.9 2.0 materials

Engineering & transport 1.5 2.6 4.1 46.8 49.2 44.5 49.6 29.1 equipment

Textiles& clothing 13.0 0.1 32.9 8.7** 11.2 2.0 4.5 12.5 2.0 4.2

Other 28.4 3.0 24.0* 5.6 18.1 28.4 15.3 19.7 28.0 27.4

Total 100 lOO 100 lOO 100 100 100 100 100 100 *of which 7.4%is olive oil. **including cotton Source: Eurostat

14

of Mediterranean countries, and is indeed their natural partner in development. It is in its best interest to avoid increasing their eco­nomic and social difficulties, which might en­courage the destabilisation of the region. The Community should therefore show itself to the Mediterranean countries a reliable part­ner, whose trade and aid policies can be counted on in the long term.'

What is a reliable partner? The Commis­sion warns against the two opposite tempta­tions which could arise in the Community (and which do, in fact exist already). The first to consider that trade concessions can solve all problems and that more trade is the answer to most difficulties. The second tendency is to focus on financial aid and investment assist­ance and to neglect trade concessions.

In fact, the two types of actions are indis­pensable and complementary. France, Italy, Greece, and, eventually, Spain, must know that an effective Mediterranean policy will be impossible if they insist on closing their mar­ketstocitrusfruit,oliveoil, wine,cannedfruit

'Europe's absence in the Mediterranean would have an incalculable political and strategic impact'

and vegetables, textiles, and footwear pro­duced in their neighbouring states. Germany, the Benelux countries, and the United King­dom, for their part, must know that even if the Common Market remains accessible to the products mentioned above - which do not compete with their production, leaving the burden to be borne exclusively by the Com­munity's Mediterranean regions-an effort on financial aid and investments will still be necessary.

Even though the idea of a 'double effort' is now recognised, it would be unthinkable that the Community open its doors to agricultural products exported by the southern Mediterra­nean. Theconceptof'EECpreference' cannot be shelved just like that, and Spain, when it enters the Common Market should have a right to benefit from the preference just like other member countries. The solutions must be wider-ranging and more specific at the same time. The following are the main ele­ments of the Natali memorandum.

Agricultural products. It is highly unlikely that Mediterranean agricultural products (wine, citrus fruit, olive oil, and certain fruit and vegetables) will find significant new out­lets outside the Mediterranean basin itself or the Community. It is important, therefore, to prevent the formation of structural surpluses which would have to be destroyed (being neithereasilysaleableon theworldmarketnor much use in the fight against hunger in the Third World). It will be necessary to maintain traditional outlets in the Common Market for

EUiiOP~82

Trade of South Mediterranean countries with the EEC Exportsto9 Imports from 9

Value %of Value %of Deficits $million total trade $million total trade $million

Egypt 1,135.6 42.7 2,559.6 38.8 1,424.0 Algeria 2,328.5 37.3 5,103.5 65.1 2,775.0 Morocco 991.7 59.0 1,878.9 51.4 887.2 Syria 518.9 47.8 901.3 35.4 382.4 Lebanon 41.3 5.1 847.1 39.1 805.8 Jordan 8.14 3.0 529.0 34.6 520.6 Israel 1,338.2 34.2 2,434.3 34.2 1,096.1 Tunisia 762.8 ND 1,633.5 ND 870.7 Cyprus 168.3 ND 422.3 ND 254.0 Malta 258.8 ND 438.2 ND 179.5

SOURCE: IMII- Direction ofTrade (1979). ND =no data available.

the southern Mediterranean countries by avoiding excessive production and to organise a consultation procedure for production levels on a Mediterranean basis in order to avoid structural surpluses.

This will not be easy because it will involve coordination between the Arab countries and Israel, between the current EEC countries and states up for Community membership. Countries that still have not achieved self-suf­ficiency in food will have to develop produc­tion of such items as cereals, milk products, and meat instead of focusing only on wine, cit­rus fruit, and olive oil. Some of this reconver­sion will not be possible without Community assistance.

The industrial sector. Here the Community must agree to maintain duty-free access for Mediterranean products, even in the 'sensi­tive', crisis-ridden sectors. The orderly ex­pansion of trade is not possible, says the memorandum, unless 'our partners have real opportunities to develop their exports in sec­tors where they are capable of producing.' These sectors, according to the Commission, include textiles, footwear, processed food­stuffs (canned fish, fruit, vegetables), and, in some cases, refined petroleum products. Pet­rochemical and steel products could be de­veloped in the future.

It would be hypocritical of the EEC to de­clare that its frontiers are open to Mediterra­nean industrial products when, in fact, it ap­plies restrictions in the above mentioned sec­tors - which are the only ones where the emerging industries of the southern Mediterranean are competitive in Europe. The application of duty-free provisions on aeronautics, data-processing and electronics equipment, automobiles, and any other areas where European industry is competitive would have no real economic significance. Certain restrictions in the textile sector must be extended, at least temporarily, because they have been agreed; but, generally speak­ing, the EC should forgo restrictive measures.

Cooperation. This aspect of the policy must cover consultation on the production of typic­al Mediterranean products and some form of concerted action in the sensitive industrial

sector. This must also involve a considerable financial effort on the part of the Community. Commissioner Natali warns that 'we should be clear that unless the money and resources for this cooperation, in which our partners place such hopes, are forthcoming, we may condemn them to total disillusion.' The Com­munity will have to mobilise significant sums of money - by utilising its financial instru­ments and borrowing on the international capital markets- to permit the necessary res­tructuring which will allow the Mediterra­nean countries to process their own raw mate­rials and reorient a part of their agricultural production.

The social sector. It would be rather naive to think that migration from the Mediterranean countries to the Community can be revived in the near future. Indications are that there will be surplus labour in Europe for several years to come and that the Community will not be in a position to call for help from migrant work­ers. The focus now should be on improving the integration of Mediterranean workers already in the Community andongivingthem true equality in their living and working con­ditions. The Community can also help to train workers who wantto go back to their countries of origin where, despite high unemployment rates, there is a shortage of skilled labour.

The success of such a global Mediterranean policy will depend on the efforts made by the Community to develop its own Mediterra­nean region which, given its geographical situation, is in direct competition with its southern neighbours, both in the agricultural and industrial areas. This is why, just a few weeks before it transmitted the 'Natali memorandum' to the Council and the Euro­pean Parliament, the Commission defined its ideas on the internal 'Mediterranean prog­rammes' dealing with southern Italy, south­em France, and Greece. Unless such action is taken to develop these regions, there could be opposition within the Community to the 'global policy' just described. At the same timeitisnecessarythatSpainand, to some ex­tent, Portugal undertake to accept and respect -once they are within the Community- the guidelines and the policies indicated above. [I

IS

How it looks to the Greeks The Community's 'Mediterranean' aspect is central to Greece's membership. THIERRY DAMAN outlines the proposals for dealing with the social and economic realities of the EEC's tenth member

On 18 October 1981, Andreas Papandreou won the parliamentary elections in Greece. His victory was a real test for the Community.

The question asked in all EEC capitals was whether Greece-the first country to sign an association agreement with the Community, as a young democracy emerging from years of dictatorship-was going to pose problems.

There were people in Europe who feared the impact of Mr Papandreou's victory. The PASOK (the victorious Socialist party) pro­gramme was a tough, nationalistic one. But it was already clear that Greece would not with­draw from the Community: the Greek penin­sula was 'European'.

But this led to another question: What was Europe going to do with Greece? Points of frictionhademergedeven before Greek mem­bership of the EEC, the most important being the adaptation of Greek agriculture to the Common Agricultural Policy.

Only a few days before the Accession Treaty, theNineandAthenswerefaced with a major problem: the alignment of Greek farm prices until the prices followed by other EEC countries. Several rounds of discussion later, the two sides were able to see eye to eye. But the problem did not disappear completely. A few months later, during the 1981 agricultural marathon, the question of the gap between EEC prices and Greek prices was raised in no uncertain terms.

What exactly does the PASOK have to say? According to its manifesto, membership of the EEC was a bad choice for Greece. The structures and operations of the Community, which bring together developed countries, make it difficult for a less developed country such as Greece to receive its just share of the cake. The current government adds that the impact of Greek accession on its economy was especially negative because of the critical in-16

EUROPE82

temational economic situation. However, these doubts have not prevented

the Greek Government from taking an active part in Community activities, even if its posi­tion- for instance, on the situation in Poland and the Middle East - is sometimes quite different from the stand taken by other EEC states. Once the fears of the first few weeks were out of the way, the reality of a Europe of Ten was one that everyone became used to, and learned to live with. So much that the re­ferendum on Greek withdrawal from the EEC, promised by the PASOK during its election campaign, was only mentioned spor­adically.

It was decided, however, that Greece would explain its stance in a memorandum to be sub­mitted to the European Commission. This memorandum, underlining the specific goals of the Greek economy, and the medium and long-term political orientations of the Social­ist Government, was submitted to the Com­munity institutions on 19 March.

By calling for a specific identity for Greece while accepting the Community framework, Mr Papandreouhascreateda precedent which will certainly have repercussions on the Com­munity's future enlargement, particularly as the basis of the memorandum- the special na­ture of the Greek economy- has been recog­nised by the European Commission. This is as follows. The structural weakn~ of the Greek economy make it difficult forifto func­tion within the Community ~work. According to the memorandum,! these structural weaknesses include di,;. limited share of the secondary sector in thegeneration oftheGrossNationalProduct(19.6jiercent), as well as the relatively important role of agri­culture-which, however, is not very produc­tive. Agriculture, in fact, employs one-third of the the working population but only pro­duces 17.2 per cent of the GNP. Finally, the services sector is threatened by the existance of a 'para-economy' which thrives on the side­lines of official economic activities.

The world economic crisis has done no­thing to improve the situation. As a result, in­flation rates in Greece are rocketing, and reached 25 per cent- double the Community average- in 1981. Other problems facing the Greek economy include a negative GNP growth rate, a balance of payments deficit which stands at 6.5 per cent of GNP, while the public sector deficit represents 17 per cent of the GNP. These figures are valid for 1981.

The Greek Government has chosen to attack existing structures in order to tackle the different problems it faces. Papandreou's team has drawn up a five-year development

'By calling for a specific identity for Greece, Papandreou has created a precedent ••• '

programme covering the period 1983 to 1987. Athens has asked the Community not to inter­fere in the application of this programme.

The specific elements of the Greek eco­nomy enumerated in the memorandum, and the methods that the Government intends to adopt to improve the existing situation, are in direct relation with Greek membership of the EEC. The Greeks are convinced that their special characteristics were not taken into ac­count by the Accession Treaty. Athens would nowliketheCommunitytorecognisetheneed to introduce special provisions, which will allow the development of the Greek economy. The Greek Government stresses that it is only on this condition that Greece can continue to be a member of the EEC. Greece would, in effect, like a special status which is not in con­tradiction to its fundamental national in­terests.

Contrary to certain forecasts, the demands made by the memorandum fall in rather well with Community logic. Their demand for spe­cial status has been made, say the Greeks, in order that they can continue to be a part of the EEC, and not because they want to leave the Community. The Greek Government would now like the Ten to authorise the Commission to study and try to solve the 'specific' prob­lems outlined in the memorandum. Greece in­tends to assist the Commission. Even though the memorandum has been inspired by national interests, the Greek approach to the problem can be regarded as European.

The specific measures requested by the memorandum fall into two categories. First, Athens would like more help from the diffe­rent Community funds. Secondly, it would like to be exempt from the strict application of Community rules on competition.

These propositions, says the memoran­dum, should allow for the introduction of me­asuresdesignedtoprotectandsupportnewin­dustries, to aid exports from small and medium-sized industries and to exclude Greek industries from production quota reg­imes- all measures which are included in the five-year programme. Particular importance is accorded to the financing oflong-term pro­jects in the least favoured Greek regions. Finally, the coordination of the different Community funds should, according to the memorandum, allow for the financing of up to 80 per cent of projects related to the improve­ment of agricultural infrastructure, the de­velopment of tourism, small industries, and crafts as well as agri-businesses.

The Commission seems to have understood the 'European' gesture of goodwill made by the Greek prime minister. Firstly, experts in Brussels agree with the description of the Greek economic situation included in the memorandum. Secondly- and more impor­tant- the Commission's position, submitted to the Ten on 10 June gives a special place to the solution of Mediterranean problems. In this sense, Andreas Papandreou seems to have won the round, because the Commission's analysis backs up his own status within Europe. [I

EUROPE82

London's 1Pompidou' is a hit with the public The Barbican Centre's first six months have seen packed houses for art, music, cinema and the Royal Shakespeare Company-a triumphant start for the City of London's 'gift to the nation'

don's answer to the famous ompidou Centre has made a profitable art. Attendances at the Barbican

Centre, the City of London's ambitious arts and conference complex, are running at higher rates than most people-including a lot of carping critics­envisaged when it opened on 3 March amid a fanfare of publicity.

T he Barbican's first art exhibition- 'After­math' , representing painting in France in the years immediately after World War Two-was visited by over 50,000 people in three months. The spectacular' Aditi' exhibition, part of the Festival of India, drew 45,000 in its six-week run.

One week in July provides an example of the Centre's popularity. On Monday 12 July, 3,868 out of a possible 3,955 people (an aver-

age paying public of 97.8 per cent) attended five performances in Hall, Theatre, Pit and Cinema. On Saturday 17 July, in those four auditoria, 5,274 customers paid £26,193 to attend eight performances averaging 94.3 per cent capacity.

Nearly 4,000 subscriptions were sold for the London Symphony Orchestra's first sea­son in Barbican Hall, which played to 73 per cent average capacity in the March and June/ July seasons. T he LSO and Barbican Centre aim to increase the number of subscribers in their 1983 subscription campaign, launched on 11 October this year.

More recently a celebrity recital series given by international artists accompanied by Geof­frey Parsons was launched before a full house by Dame J an et Baker. With the concert by the London Philharmonic Orchestra on 3 Octo­ber, all four major London orchestras will have appeared at the Centre within seven months of opening.

Amongst the outside concert promoters to

have worked at the Centre, Raymond Gubbay has enjoyed particular success with fifteen complete. sell-outs attracting over 30,000 peo­ple to date. His furore plans include a repeat next May· of his successful presentation of A bel Gance's epic silent film, 'Napoleon', in Barbican Hall.

Doubts over whether the Royal Shakespeare Company's large and loyal sup-

port would follow the Company to the Barbi­can have been dispelled by record advance bookings fori ts opening season. Since moving to its new London home in May, the RSC has been seen by over 150,000 people attending over 250 performances at an average of almost 90 per cent capacity.

The 280- seat Cinema 1 has established a regular audience for its one month seasons: over 30,000 people have already seen its screenings. After opening with the British re­vival of Max Ophuls' 'La Ronde', seasons of T ati and Keaton were immensely successful.

The Centre's ability to attract new audi­ences has been proved: lunchtime concerts for £1 or £2 per ticket have been immensely popu­lar, and a series of open air concerts by the LSO - the Stuyvesant Pops- on the rooftop Sculpture Court drew nearly 19,000 people.

The many free events, including over 100 performances in the two week Family Festiv­al, and the special Bank Holiday entertain­ments, have attracted family audiences from throughout the Greater London area.

Conference and trade exhibition activity, which began prior to the Centre's official opening, celebrates its first anniversary on I October. Despite difficulties due to the reces­sion, there have been several notable succes· ses. Among the first year's most successful ex­hibitions have been Info '82, All Electronics, the London Book Fair, and most recently the Centre's first public exhibition - Personal Computer World, which attracted over 50,000 visitors in four days. 01

A popular amenity for locals and visitors -the Barbican Centre with its lakeside terrace.

,. 7 .. t7? 55

New packaging rules will help shoppers

FromlJanuaryl983,underanEEC Directive, most pre-packed foods sold in EEC countries must be date­stamped to give shoppers some idea

of how longtheywilllast. Most are supposed to carry a 'best before' date, but highly perishable foods may carry a 'sell­by' date- this is optional.

In theory-reports the European Food Law Association- this will help shoppers, provide more effective consumer protection, and make trade easier between EEC member countries. In practice, it is likely that some EEC countries will not be ready to implement the directive by 1 January, because they have not yet passed the necessary national legisla­tion enabling them to do so.

Furthermore, so many national variations are permitted under the directive, and there are so many national differences of opinion over what is meant by 'highly perishable' foods, that introducing uniform date-stamp­ing throughout the Community may not be the simple matter it was intended to be.

On the eve of the 1982 International Food Law Congress, held in London last month,

rr1 EUROPE82D 2 m c rw on r 7 · m rz:n rtll

Talking business Paul Alien, chairman of the UK Section of the EuropeanFoodLaw Association(andcurrent chairman of the UK's Institute of Tmding Standards Administration) said that the co­ordination and harmonisation of enforcement of food law in Europe was something that manufacturers, retailers and consumers re­garded is a good thing in principle. 'It makes life easier for manufacturers if they have to comply with just one law if they want to ex­port, mther than with different laws for each country'. However, he added that national variations make production, packaging and marketing harder and therefore more costly.

'This may make manufacturers reluctant to export to some countries, thereby reducing the choice of goods in the shops, or it can push up prices- again, to the disadvantage of con­sumers,' Mr Alien added. He went on:

'Making law is relatively easy compared with the problems of enforcing it. It's one thing to set standards, quite another to ensure that producers comply with them. We'll be looking at how effective food law preventative measures and sanctions in Europe are. We shall also be considering the problem of the lack of uniform enforcement of EEC laws -18

there is little point having the same laws in each country if the national enforcement au­thqrities interpret them differently.

'Instancessuchastherecentcasewhenfruit and vegetables inspected and passed by Dutch officials as complying with European regula­tions were rejected by German officials 45 mi­nutes later, only make a mockery of the com­mon market and bring the law into disre­spect'.

Rail freight is going places

I ncreased grain traffic- a direct result of EEC farm policies- has brought success to rail freight. Its business is expected to rise from last year's 172,000 tons to a

massive one million tons in five years. A report in Railnews points out that this

comes only eight years after BR almost totally withdrew from the market. Terminals were closed because it was considered there was no

future in grain. AdrianMilne,divisionalfreightmanagera

King's Cross, who has been seconded to in vestigate the potential and develop the nev traffic, explains: 'The turnround in grain for tunes can be traced to the EEC's farm polic: which now supports farmers, encouragin1 them to produce more- be it wheat, barley o oats', he adds:

'Now this year they are talking of a bumpe harvest of20 million tons. A lot of this is use on farms as feedstock and 75 per cent move• short distances. But this still leaves an awfull large tonnage for us to go for'.

There is a large flow from the growing area of Southern England and East Anglia, trave ling long distances to feed and flour mill! breweries and distilleries. There is also a ever-increasing export trade in high-qualit grain.

To help secure the traffic British Rail ain: to develop new rail-connected terminals wit discharge pits at Leith, Gateshead, Hull an Glasgow. It also intends to look for expo opportunities - Southampton alone is e: pected to receive one million tons a year fc export.

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000 Ban~ptcy rate1sup

Hi-speed data for exporters

E lectronic publishing-with quick access to European markets -is ·taking off. A British company, NV A Europort, based in Whitchurch,

launched a newviewdata service in May to help exporters get in early on European pJJblic contract tenders. Now, say NV A, they are 'enhancing the database' to include contracts supported by the European Development Fund.

Thirteen chambers of commerce have been using the service on a trial basis, to promote awareness of business opportunities in Europe to their local members. These trials, reports NVA's chairman, Neil Vann, have been well received. The Department of In­dustry gave its blessing to the system - the Minister of State, Kenneth Baker MP, called information technology (IT to the trade) 'the fastest-developing area and business activity in the Western World'.

Some of the biggest names of European industry and finance, including De Lorean and Italy's Banco Ambrosiano, have lately

plunged into bankruptcy, making front­page news all over the world. But a large number of smaller companies all over Europe have also been forced out of business by the economic recession.

Figures released recently by the European Commission in Brussels have underlined the disastrous consequences of the recession on business opemtions. These figures, covering the last 5 years in the Community, revealed that bankruptcies and other forms of failure rose dmmatically in the member states.

In 1981 the Netherlands recorded the largest increase in number of bankruptcies over 1980, with a rise· of 42.1 per cent, fol­lowed by a 27.4 per cent annual increase in the Federal Republic of Germany, 26.4 per cent in the United Kingdom, 20.3 per cent in France, 16.8 per cent in Belgium and 7. 9 per cent in Italy.

France, with a total number of 20,895 bankruptcies in 1981, led the list of Commun­ity countries, followed by the United King­dom with 14,210 and the Federal Republic of Germany with 11,653.

The pipeline and Europe's farmers

W hy should farmers care either way whether Europe defies President Reagan by pressing on with the pipeline which will

eventually take gas from deepest Russia to the heart of Europe?

Answer: because the pipeline could hold the key to the biggest problem facing Euro­pean farming at the present time- the imba­lance between the livestock and cereals sectors of the industry and the growing mountain of surplus grain.

Edwin Gillanders, writing in the Aberdeen Press & Journal, declares that, apart from the obvious advantages to the European economy as a whole, the pipeline- which could supply up to a third of Germany's needs- will have a direct bearing on farming in Britain. He con­tinues:

'The West needs oil, the East needs grain; and the East must sell its surplus fuel to earn currency to buy grain from the West. It is as simple as that and goes some way to explaining why France and other EEC countries, includ-

ing the UK, decided they could not go along with President Reagan.

'As North-east Euro-MP Mr James Provan points out, it would seem to make more econo­mic sense to dispose of surplus grain virtually straight off the combine mther than incurring the heavy haulage, storage and financing costs which intervention involves­and still having to pay export refunds to get rid of the stuff later in the season.'

Euro-funds for new business scheme

Aewschemeto help the growth of small businesses in the Tyne and Wear area has been launched with the help of European Community

funds. Over £1 million from the European Com­

munity social fund will help pay the salaries of a professional management team providing high level skills needed to set up new businesses or help existing small businesses to expand.

The management team will be employed by Entrust, a trust which has been set up on the initiative of various local organisations includ­ing the local authorities and regional trade unions. Confidential counselling about de­veloping new business ideas will be available as well as training in management skills.

In some cases Entrust will provide an ex­perienced manager to work for a time under the direction of the owner/manager. Other key personnel can also be provided under the scheme, says Entrust, to accelemte the expan­sion of small businesses which might other­wise have been held back for lack of money to pay managerial salaries.

Although Entrust support will be available to small businesses for as long as firms need it, the EC backing has initially been guaranteed for the first three-year experimental period. Tyne and Wear is one of seven areas receiving similar support from the social fund through­out the European Community.

Particular emphasis will be placed on manufacturing companies using newer tech­nologies in an attempt to shift the balance away from that of 'a branch economy and an employee-dependent culture, towards that of indigenous manufacturing to replace dying industries and to provide a basis for future growth' says the trust.

But the aim is not to duplicate any of the ex­isting facilities provided in the area by local authorities and development agencies. In­stead, the trust will work on the principle of 'additionality' by building up and extending the facilities already available.

D BRITISH BUSINESS

19

,..,.,.,- - - -

Stepping on the gas

20

The Community now produces 75 per cent ofits natural gas requirements. By 1990 that figure will be down to about SO per cent. In keeping with the Commission policy of diversifying energy sources member states are now looking elsewhere to satisfy their demand for natural gas.

Despite the present controversy over the Siberian gas pipeline, ener­gy from that source, even when pro­duction has reached its peak at the end of the decade, will account for nomorethan4percentofCommun­ity's total energy supply.

Large variations will be seen among the member states but in no case will the Russian gas share ex­ceed 33 per cent of the total gas con­sumption in the countries involved. There are many other sources. In October, France and Belgium begin taking Algerian natural gas while Italy is negotiating with both Alger­ia and Libya for supplies from North Africa. By 1990,Norwaywill provide 12 per cent of the Commun­ity's overall natural gas require­ments.

Other potential sources include Canada and several African coun­tries. In the event of an interruption in supply from non-Community sources,memberstateshavealready taken, or are considering measures which will help to offset the short­fall.

Despite some outside suppliers hankering after the so-called 'crude­oil parity', Energy Commissioner Etienne Davignon has stressed that gas prices must be kept low enough to encourage a shift from oil pro­ducts, again in keeping with the principle of supply diversification.

The Commission has also indi­cated that its policy will not be inter­fered with. The formal complaint sent to the US Commerce depart­ment contesting the legality ofPres­ident Reagan's embargo on Com­munity supplies for the Siberian pipeline was evidence of that. The attempted extension of US jurisdic­tion sought to include even com­panies which had merely bought goods from the US in the past.

Want a move?lt's amaHer of degree Article 52 of the Treaty of Rome lays down that Community nationals should be free to establish themselves in whatever member state they wish. Article 54 provides for a general programme to eliminate existing restrictions on freedom of movement.

Twenty-five years after the sign­ing of the Treaty the legal and admi­nistrative barriers to the circulation of so-called 'liberal professionals' -architects, pharmacists, engineers etc -are still many and varied.

By far the biggest stumbling­block has been the reluctance on the part of national governments and professional bodies to recognise the diplomas, degrees and certificates of other member states.

Prior to 1957 therewereanumber of bilateral and multilateral agree­ments between member ·states which allowed limited exchanges in certain fields. The Rome Treaty then provided for the elimination of all barriers by means of directives.

When SEPLIS (the European Secretariat of the Liberal, Intellec­tual and Social Professions) was set up in April 1975 to liaise with the Commission on behalf of the various groups it represented, no such directives had yet seen the light of day.

Two months later one was approved, giving doctors in the Community freedom of establish­ment. Over the next five years nurses, vets and mid wives benefit­ed from similar treatment, while lawyers were permitted to practise in another member state but not set up shop there.

The 'doctors directive' first went to the Council of Ministers in 1970. That it took five years of delibera­tion before it was finally approved is an indication of the immense tech­nical difficulties which have to be

overcome when legislating in this sensitive area.

But there is still much to be done. At present there are directives covering pharmacists, architects, engineers and lawyers in the pipe­line. But there are still professionals in the health, legal, economic, tech­nical, social and cultural fields who must be given freedom of establish­mentifEuropeanintegrationis to be meaningful.

Moving it by water This year it is estimated that some 185 million tonnes of material will travel along the Community's waterways.

That is equiv8J.ent to 44 per cent

of the total transported compared to shares of 40 per cent and 16 per cent for road and rail respectively.

'fhe Ten's canals and rivers should be used even more, accord­ing to a report drswn up in June on behalfoftheEuropeanParliament's Transport Committee by West Ger­man MEP Karl-Heinz Hoffman. Too many bulky and heavy goods travel by road which are better suited to carriage by water, says the report. Fuel savings are also con­siderable.

The report insists that the first priority of the EEC's transport poli­cy should be to close the gaps in the existing network. Herr Hoffman maintains that this does not mean encouraging the construction of networks which would duplicate those already in existence.

Already there are 1300 kilometres of waterways along the 1500-kilometre route from the North Sea to the Mediterranean. The comple­tion of the Rhine-Main-Danube canalandaRhine-Rhonelinkwould close the remaining gaps, says the report.

It urges the Federal German Gov­ernment and the State of Bavaria to sort out their differences so that the first link can be completed, and calls on the European Commission to look into the possibility of a Rhine­Rhone canal.

Can we harmonise car prices? The Treaty of Rome seeks to establish a common market for all goods and services in the Community. At present, however car prices vary considerably between member states. In the uK for example, they average 20 per cent more than in the Federal Republic of Germany for a variety of reasons including VAT rates and dealer margins.

People buying cars in Britain pay 90 per cent more than their coun­terpartsinDerunark,SOpercentmorethanBelgiansandabout35per cent more than the French and the Germans.

The Irish car buyer is not much better off. Prices there are 30 per cent higher than in Denmark and about 20 per cent greater than those prevailing in the Benelux countries.

It is hardly surprising, therefore, that British and Irish car buyers should want to take advantage of lower prices. In the last couple of years they have been flocking across the Channel to do just that with the result that car imports into Britain alone have jumped from a few thousand in 1979 to more than 50,000 last year.

But not all potential buyers have been successful. Some car dealers have refused to sell right-hand drive cars for re-export to Britain and Ireland. Others have resorted to quoting prices far in excess of those normally charged in the market. In many cases, manufacturers have been in collusion with their local dealers.

The Commission has already acted to stamp out the practise. In Au­gust the Commission issued an interim order to Ford Werke AG of Cologne to ensure that trade in right-hand drive Ford vehicles be­tween member states should not be prevented. This situation will be reviewed at a later date. But the Commission does not want to precipi­tate a drastic cut in market prices and is therefore considering the in­troduction of a measure which would enable buyers to purchase any­wherein the Community when the price difference between their own country and the country of purchase is more than 12 per cent.

L ...

Europe's flaming forests The summer of 1982 was a scorcher- but unfortunately it was more than just sun­worshippers who were burned. All the signs are that this will have been one of the worst years for forest fires on record, far surpassing 1978 when a total of 176,618hectaresofwoodlandwas destroyed.

In the French Department of the Var alone, 1250 hectares of ferest have been ravaged by fire in the first half o£1982, doubletheannualaver­age for this time of the year.

Severe drought, particularly in the Mediterranean, has been largely. to blame, but negligence also plays a considerable part. Almost half of all forestfiresaretheresultofacasually discarded cigarette or match or a neglected bonfire. About 15 percent of fires are malicious.

Outraged by this needless des-

Code of conduct for adoption With the growing use of contraceptives and the falling birth rate in the-Community there are fewer children available for adoption, while the number of prospective adoptive parents is growing.

French MEP Gerard Israel, in. a document on adoption drawn up on behalf of the Parlian:J.ent's Youth .Conimittee, maintains that priority should be given to the interests of the child but there should be less of the 'humiliating and unjust atti­tudes' on the part of those responsi­ble for placing children when con­fronting prospective parents.

Thedocumentcallsforthesetting up of a system of licencing organisa­tions and an overall Co=unity code of conduct.

nr mr 4EUROPE 82b * ' c. ·g 1

truction, Mrs Theobald-Paoli, MEP, has called for a pooling of member states resources and know­how to combat the problem offorest fires.

Research centre's space-eye

• VIeW You could be forgiven for thinking that 'space sensing' meant communications between extra· terrestrial beings. But it has another, more down-to-earth interpretation.

Remote sensing from space, (to give the tecb,nique its full title) by means of sensors on board satellites and aircraft, has a wide range of ap­plications including weather fore­casting, long-distance telecom­munications, cartography, mineral prospecting and tackling environ­mental pollution.

The European Community, through its Joint Research Centre, has been actively involved in this type of investigation since 1973. The first priority of the work was to improve the Community's agri­cultural potential. But in 1977 the programme was extended to include sea protection, says a report on re­mote sensing from space published bytheCommission'sJointResearch Centre. In 1980 18.35 million ECU (about £10m) was allocated in a 4-year programme.

Champagne down the drain? An exceptionally good year for France's 13,000 Champagne growers, after a perfect summer, has produced a great cm- the best, according to some reports, in living memory.

But there is a snag. As much as one-third of the wine may have to be wasted, to protect the growers from a catastrophic fall in price .

Growers and wine merchants have agreed to offer about 350 mil­lion bottles of the 1982 for sale -three time more than 1981, and forir times more than 1980. The rest, which would add up to 100 million bottles, will never pass the lips of a Champagne-thirsty public- except perhaps as vinegar.

Which ·will come as a bitter dis­appointmentto a lot of people.

QUESTIONS IN THE HOUSE

Sylvie Le Roux, France: The United States is preparing to lift the total ban on dumping radioac­tive waste at sea which has been in force in the US for twelve years. What consequences may the lifting of this ban have for the Community, and has this matter been considered at official EEC/USA meetings?

Answer by Karl-Heinz Narjes on behalf of the Commission: No mention was made either during official meetings between the EEC and the United States, or at technic­al meetings, of the attitude of the United States Government towards the disposal of radioactive waste at sea.

The Commission raised the ques­tion of a possible lifting of the Un­ited States' ban on dumping of radioactive waste at sea with the Office of Radiation Programmes of the US Environment Protection Agency. The Commission was in­formed that, while the United States did not ban the dumping of low­level wastes, there was a total ban on the dumping of high-level wastes at sea. The United States Government did not plan to modify the latter.

Luc Beyer de Ryke, Belgium: From the beginning of April until22 June, trade sanctions were imposed against Argentina by the Council of Ministers of the Ten. Can the Com­mission indicate the total volume of trade held up by this embargo and the main economic and industrial sectors affected? Can it also indicate whether it is considering granting special aid to undertakings which suffered a loss of earnings as a result of the embargo?

Answer by Wilhelm Haferkamp, on behalf of the Commission: Between 16 April aild 22 June the importation for release for free cir­culation in the Community of all products originating in Argentina was suspended. That suspension did not apply, however, to the re­lease for free circulation of products accompanied by import documents issued before the date of its entry into force, or to be imported pur­suant to contracts concluded before that date or en route to the Com­munity at that date. In adopting those arrangements, the Commun­ity wished to take into account its obligations and legitimate commer­cial interests involved.

It is not possible to indicate the

total volume of trade affected by the suspension measure since other fac­tors also had an influence on trade, and it is difficult to evaluate the rela­tive importance of the factors in­volved. Those other factors include the disruption caused by the milit­ary operations- this applies both to Argentina and to its neighbours -and the collapse of the Argentinian market as a result of the hostilities.

The Commission does not envis­age any special aid to Co=unity firms in this context.

Jean Couste, France: Will the Commission soon be in a position to make known its conclu­sions on restrictive practices in the distribution of motor cars in the Co=unity, and if so, when?Is Un­ited Kingdom policy in this area -comingasitdoeson top of the almost permanent conflict between the UK and the rest of the Co=unity -likely to lead to reconsideration of its membership of the Community?

Answer by Franz Andriessen, on behalf of the Commission: The phrasing of the Honourable Member's question suggests a mis­understanding of the nanire of the problem. The representations which the Commission has received in support of action to eliminate bar­riers to trade .in motor cars in the common market have come pri­marily from citizens of the United Kingdom. A number of the Com­mission's investigations into the barriers to parallel imports of motor cars in the co=on market erected by certain manufacturers, based in various member states, are nearing completion.

As to the attitude of the United Kingdom authorities, the Commis­sion would point out that they have already, on 2 February this year, ex­pressed publicly before Parliament at Westminster their determination to work out, in consultation with the motor vehicle industry and the motor trade, a solution to the prob­lems facing parallel imports as a re­sult of the exclusive nature of the certificate of conformity for motor vehicles. This positive stance on the part of the UK authorities was in part in response to intervention by the Commission.

The Commission would like to make it clear that the restrictive practices referred to by the Honour­able Member are attributable to cer­tain motor vehicle milllufacturers and not to the public authorities in any member state.

21

'STOP MOANING ABOUT THE MARK£1'

Britain should 'Stop moaning about the Common Market and make it work for us,' says Roy Close, Director General of the 72,000-

strong British Institute of Management. He was commenting on the result of a BIM survey which has shown that Britain's managers are wholeheartedly committed to the UKremaining in the Community.

The survey's findings reveal that an over­whelming majority are in favour of mem­bership and that they feel great damage would be done to British industry if the UK with­drew.

Recent EEC decisions which have adverse­ly affected Britain have not altered their view. The major part of the survey was completed before the EEC's attitude on sanctions against Argentina was known and its decision to over­ride Britain on farm prices was announced, so a further 'hot line' consultation was organised to discover whether members' views had changed as a result. But they remained in favour of the Community. Managers feel that the UK should not over-react to EEC action which might be seen as lacking support for Britain.

The survey also shows strong support for the political benefits of remaining in the EEC. A large majority of members believe that the UK gains directly from the Community's in­fluence on international trade.

The survey shows that managers vigorously support the removal of non-tariffbarriers and

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22

EUROPE82

EEC budget reform to restructure the com­mon agricultural policy and achieve a perma­nent solution to the problem of disproportion­ate UK contributions. They consider it im­perative that more Community expenditure should be devoted to supporting industries other than agriculture.

Mr Close commented: 'Market-bashing will not bring British industry the benefits which EEC membership can provide. Mana­gers realise that a major effort must be made to take advantage of the opportunities which the Community has to offer.'

CALL FOR TRADE WITH EAST EUROPE IF W" w:mr -D

espite US calls for a ban on exports of western technology to the Soviet Union, following events in Poland, a European Parliament committee

has recommended closer trading links with Eastern Europe.

The European Parliament's External Eco­nomic Relations Committee also called for an easing of restraints on the exchange of persons and information between East and West in compliance with the Helsinki Final Act, and recognition of the European Community by the state-trading Comecon countries of East­em Europe. The Community is responsible for trade relations between its members and third countries.

Trade with Eastern Europe in 1979 accounted for 7.6 per cent of Community ex­ports and 7.4 per cent of Community imports. But the relationship between the two trading blocs has been constantly plagued with prob­lems.

Economic planning in Eastern Europe has meant that Comecon countries have found it difficult to export things that theW est wants. Because of the non-convertibility of their cur­rencies, this has resulted in a chronic shortage of hard cash to buy much-needed imports of

western technology. The problem was compounded when high

expectations of economic growth in the East­em bloc in the 1970s led to an over-extension of credit by western bankers and heavy in­debtedness amongst Comecon countries. Poland and Rumania were both forced to seek a rescheduling of their debts and the need to boost exports became even more acute.

Friction between the trading blocs has in­creased with accusations of 'dumping' or sell­ing at below cost price on foreign markets, levelled at state-subsidised Eastern European producers. European Community officials point to the steel, textile and finished product sectors as examples, in addition to complain­ing bitterly about the activities of the huge and heavily subsidised Eastern European fleets on world shipping markets.

But according to the External Economic Relations Committee's report and its author German Liberal MEP Ulrich Inner, closer links with Comecon and further trade agree­ments similar to the one signed between the Community and Rumania in 1980, could eventually ease tension and bring mutual benefits to both sides.

DANISH TV VIEWERS ARE ALL WIRED UP

•

M ore than half of all Danish households have cable television, making Denmark one of the most wired societies in the

world. But the number of channels has deliberately been kept to a minimum, partly to limit the influx of popular US-produced series.

There is only one Danish television chan­nel, government-controlled, and the cables are only allowed to carry the Danish and -where reception is possible - the German, Swedish, and Norwegian channels. No com­mercials are allowed on Danish television, and programme content is a carefully balanced mix of mainly US entertainment and locally produced cultural and current affairs prog­rammes.

But now the satellite technology is challeng­ing the traditional policy of deciding what's best for the people. By the end of this decade 30 to 40 channels from all European countries will be available to most Danes, and the monopoly of Danish radio and television will evaporate completely.

The majority in Parliament fears that the hegemony of the US programmes will be further strengthened - because most people want to watch entertainment programmes and US series dominate the market. Furth­ermore, most Danes understand English far better than they do German, not to mention

French and the other continental languages. The non-Socialist parties want to meet the

new challenge by allowing a second Danish channel, financed at least partly by commer­cials, to operate in competition with the ex­isting channel. They say that five million Danes have a right to a choice between at least two Danish programmes.

The Socialist-led majority is ready to con­sider a second channel, but a channel without commercials and operating on the same basis as the present channel. This, the majority hopes, would prevent a second channel from stealing too many viewers by adopting a more popular programme policy than that of the ex­isting channel. In the coming months the first experimental local radio and television sta­tions are expected to go on the air, thanks to a new law.

There has been widespread interest in get­ting the licences, even though no commercials are allowed and no book-ups with cable tele­vision permitted, limiting the number of viewers to those few prepared to invest in spe­cial antennae. Many newspaper groups, however, believe that this is the first indica­tion that the Government is bowing to the in­evitable - a liberalisation. They will invest money in stations to gain the necessary experi­ence, and believing that the Danes will soon demand the same kind oflocal electronic news coverage that is taken for granted in the Un­itedStatesandagrowingnumberofEuropean countries.

If no legal basis is created for television financed by commercials, many observers be­lieve that special Danish programmes will be beamed toward Denmark from satellites, forcing the hand of the Government. But the Government seems determined to give up its ground as late as possible.

LET'S GET RID OF RESTRAINTS SAYS MINISTER

AaU for the European Community to

act swiftly to bring more benefits of membership to the populations of the T en by sweeping away

remaining barriers to trade was made by Douglas Hurd, Foreign Office Minister of State, at the end of September, in Brussels.

High on Mr Hurd's list of priorities is the liberalisation of inter-regional air services, currently operating under tight restrictions and freer movement for road traffic because at present goods can be circulated more freely under Community regulations than the vehi­cles that carry them. The minister also wants free competition in the provision of insurance services, agreement on a common fisheries policy and more spending on regional de-

EUROPE82

M inister of State Douglas Hurd

velopment and social policies to combat un­employment.

A major problem facing the Community is that the present balance ofCommunityspend­ing is not meeting the real needs of its citizens, Mr Hurd says. More money should be allo­cated to the policies faring less well than the common agricultural policy which soaks up 60 per cent of EEC spending. An energy poli­cy, for example, would commit the commun­ity to develop coal resources and reduce future dependence on oil.

He called for Community actions on a un­ited front to deal with internal and external pressures currently facing the community in­cluding EEC-United States current trade dif­ficulties on steel exports and the Siberian gas pipe.line on which he said the Community should avoid an economic confrontation.

Mr Hurd also warned member states against the growing call at home for protection against imports. When a factory closed or a trade languished there would always be peo­ple who argued to exclude or penalise even legitimate foreign competition. But member states should only make limited tax conces­sions to such pressure which was destructive to international trade, be said. 'If the Com­munity did not exist,' he said, 'member states would be pursuing many more protectionist measures than they are at the moment which would impoverish their neighbours as well as themselves.'

Mr Hurd said that Britain wanted member states to go much further in bringing down barriers within Europe. Bringing 'clear bene­fits' to all its members was the best answer to arguments against the Community, he said. But it also meant dealing with problems stand­ing in the way of Community development including the long-outstanding problem of Britain's contribution to the Community budget.

The Community's finances as a whole were also a problem to be solved, Mr Hurd con­tinued, because of the runaway costs of the common agricultural policy. More money was needed to finance other Community policies.

But member states were unlikely to agree to increase the spending without assurances that the financial burden would be more evenly distributed. ' A situation in which any country finds itself contributing large sums to partners richer than itself is not likely to endure,' Mr H urd maintained.

But Britain was only seeking fair play, he added, and not special treatme.nt. He warned that, unless the fact that Britain was carrying a major financial burden was dealt with, it was going to be difficult to end controversy about British membership. It was up to the Com­munity's three institutions, the Commission, the European Parliament and the Council of Ministers, to tackle the problems together. But the Council of Ministers, which took the final decisions, needed to exercise more disci­pline in working together. At the moment ministers were attending council meetings 'armed with dossiers, flanked by advisers, and fearful of protectionist measures at home', he said. ' It is seen as a sign of courage to fight, yet often it is more courageous to agree.'

0 BRITISH BUSINESS

FULL-TIME BENEFITS FOR PART-TIME WORKERS?

l emporary workers could be given

the same rights as full-time mployees, if the House of Lords

Committee on the European Communities gets its way.

A draft directive from the Commission may pave the way for a change of status for a categ­ory of workers who, a Lords' report says, have been the 'second class citizens' of the labour force, largely unprotected by law and often ex­ploited because legislation has been de­veloped around full-time workers.

The Commission's proposal aims to im­prove the part- time workers' status by 'ex­tending on a proportional basis the rates of re­muneration and other financial benefits en­joyed by full-time workers'.

With the exception of Denmark, the UK has more part-time workers than any other member state. One-fifth of the British work­force is employed part-time, and there has been an upward trend in part-time employ­ment in the last 20 years from 2 to 4 million.

Another half-million are likely to be added to the current figures before the end of the decade, says the report. Over 80 per cent of the part-time work-force are women whose employment is generally limited to certain sectors of industry - services, food, electrical engineering, textiles and clothing - at lower paid grades.

23

Having spent the best pan of ten years getting tachographs into EEC truck cabs, the EEC Commission now seems bent on getting most of them out again. That, at least, is the fear of the major European component manufacturers who have built up a $150m-a-year business supplying monitoring equipment to the 350,000 commercial vehicles registered in the Community each year.

The manufacturers, including Lucas and Smith Industries of Britain,JaegerofFranceand Kienzle of Germany, wrote to the Commission this week warning it that proposed changes to current EEC regulations could take away up to two thirds of their market. The social cost would be several thousand jobs.

The tachograph manufacturers are probably worrying unduly. Transport policy is one of the areas where European integration moves at its slowest. Since ittook 10 years to get the spies into the cab, it is going to take at least as long to get any of them out again.

-Economist

Edward Heath's chum, Madron Seligman, who represents West Sussex's interests in Europe, has won a decisive victory over telephone tunes at the EEC headquarters.

Telephone tunes? Well, in Europe, where they have advanced telephone systems, a little ditty is played in your ear while you wait for someone to reply. Up till now at the EEC HQ, the tune has been 'Home On The Range'.

Seligman says: 'It was ridiculous that the European Commission should be playing an American cowboy tune'. · So he wrote to the EEC

president, Gaston Thorn demanding a change.

Thorn agreed. The tune will now be 'Greensleeves'.

-Daily Express

The battle against the big car manufacturers which is being waged by the EEC Commission is not being helped by the lethargy and ambivalence of individual governments.

Standardisation of V AT, other taxation and car specifications would help. For instance it is cheaper for Germans to buy cars manufactured in Germany by crossing into France.

Therefore the efforts of the European Commission and the European Parliament are directed to helping every single car owner and potential car buyer in the UK.

-Letter in the Observer

24

EUROPE82

A concerted campaign to sell British food in France is to be inaugurated this autumn. It is certain to meet strong resistance from French producers and already shops are being circulated with posters which- in breach of EEC free trade conventions­flatly urge consumers to boycott British produce.

More than anything, the campaign reflects Britain's dramatically changed status in the past few years, from depending heavily on imports to self­sufficiency or surplus in many agricultural products.

Sir Stephen Roberts, chairman of the Milk Marketing Board, cited the fact that Britain was now more than 80 per cent self­sufficient in dairy products, compared with less than SO per cent five or six years ago.

-TheTimes

Britain now has a record Common Market-style grain 'mountain' of more than one million tonnes- and the total is still rising fast.

After a record harvest which has exceeded 20 million tonnes, farmers are finding they can get more for their grain by selling it into "intervention" than to grain buyers or users like millers and feed compounders.

Already some 900,000 tonnes of barley and more than 300,000 tonnes of bread-making wheat have been offered to the Intervention Board for Agricultural Produce­the arm of the Civil Service that administers the Common Market farm support arrangements in Britain.

The Intervention Board buys up and stores the grain to try to create an anificial shortage and thus raise prices paid to farmers on the open market.

-Daily Telegraph

The 'British' import is insidious. For instance, a report from the Institute of Fiscal studies shows how the structure of the British car market has kept prices here much higher than abroad. Nearly two­thirds of new cars are bought through companies or institutions under pressure to buy British brands, even though they may be imports.

This, aided by restriction on foreign types, always appears to help BL et al but in the long term has merely allowed British factories to become uncompetitive and strong British brands to be sourced abroad. Elsewhere, too, if you buy a British brand video, you will buy an import whereas Hitachi television may well be British made.

-Sunday Times

In the period since Ian MacGregor took over at British Steel, costs have been reduced and prices have risen under the EEC regime; but the volume of business has fallen away, and the hoped for build-up of profitable export business has proved impossible to realise.

MacGregor and the Government know that they are now faced with taking hard strategic decisions on the shape and size of the British steel industry. In the coming weeks, massive short-time working across the corporation suggests itself as the most likely development, resulting from the high level of stocks (equivalent to 15 weeks' production) built up before the summer holidays.

-Observer

A Labour government would immediately stop Britain's payments to the Common Market as a prelude to complete withdrawal, Shadow Chancellor Peter Shore said last night.

Then, after disengaging from the Treaty of Rome, Britain would seek some new form of cooperation on the basis of'socialist, not capitalist ground rules,' Mr Shore told a fringe pre-conference meeting.

-Daily Mail

This year's English wine is expected to sell from between £3 a bottle for the cheapest whites to £6.20 for the best reds. But even with production of a million bottles there will be no surplus: every one can find a market, either here or abroad, especially Germany. Nevertheless, wine growers complain that the Government takes up to £1 out of the price of every bottle for excise duty and VAT.

-Observer

Two Euro-MPs have promised to raise questions through the Euro­parliament about a subject guaranteed to bring the blood to the cheeks of their male colleagues: menstruation. More particularly, J anie Buchan and Ann Clwyd are to question whether or not it is discriminatory to levy Value Added Tax on sanitary towels and tampons.

The argument, put tirelessly by campaigner Denise Flowers over the last two years, is that to levy a tax on items which women, but only women, have to buy for hygienic reasons is discriminatory.

-Spectator

The Benelux countries are strongly attracted by an a la carte model for Europe as a means of hastening the process of integration. Denmark, West Germany and the UK are the most sceptical about what they believe to be Italian flights of fancy. How, they ask, could the integrity of the Common Market for industrial and agricultural goods be maintained if member states could pick and choose which regulations to apply?

-Financial Times

Consumer and environmental groups in Britain and other European countries yesterday launched a campaign pressing the EEC to phase lead out of petrol in all member states.

Existing Common Market legislation forbids a lead limit lower than 0.15 grams per litre.

-Guardian